Geely to open three Volvo factories in China

Sep 14, 2010, 10:50 GMT

Beijing - Chinese auto giant Geely announced its intention to build three factories to produce Volvo vehicles in China, after acquiring the Swedish brand last month, reports said Tuesday.

The new plants would produce around 300,000 units per year and improve the manufacturer's presence in the world's largest car market, Zhejiang Geely Holding Group Co chairman Li Shufu was quoted as saying by the Wall Street Journal.

The expansion would nearly double the output of Volvo Cars, which sold around 325,000 units worldwide in 2009, an increase of 59 per cent on the previous year, but only 24,400 in China.

The Chinese car market has expanded 39 per cent since the beginning of the year.

Geely said it aims to sell a combined 2 million units of Geely and Volvo vehicles annually by 2015.

Li said the challenge was not to 'get Volvo out of trouble,' as people seemed to believe.

'The company is profitable,' he said. 'Our real challenge is how we are going to evolve and develop the Volvo brand further.'

He said he was planning more luxurious models, as the current Volvo range has 'not reached the sophistication of the BMW 7-Series or the Mercedes S-Class,' he said.

Locations under consideration for the new plants included the eastern port city of Shanghai, the town of Chengdu in the south-western province of Sichuan, and the town of Dagin, in the Heilongjiang province in the north-east of the country.

An independent engine plant was also in the works.

Geely bought Volvo from US carmaker Ford Motor Co in early August for 1.8 billion dollars.