There was little doubt since Geely’s 2010 purchase of Volvo about the political outcome. The second assembly plant in Daqing is already under construction and the first prototype cars will be built later this year for training.
Word comes this morning of Chinese government approval of Volvo Car Group plants in Daqing and Zhangjiakou. As a result, Zhejiang Geely-owned Volvo Cars will ultimately have a bigger Chinese industrial presence then Volvo has in Sweden when you include Chengdu, which is already building prototype stretched versions of the S60 sedan in preparation for serial production in Q4 of this year. The Chengdu plant is operating under an extension of an already existing production license held by a Geely Holding company with its manufacturing license approved in June. Chengdu is in the capital of Szechuan province in Southwest China and can assemble 125,000 vehicles a year.
The Swedish (Chinese?) brand wants to sell 200,000 vehicles a year in China by 2020, far ahead of the 44,000 Volvos sold during 2012. Volvo claims that its plants in China will be operated in accordance with Volvo Cars manufacturing standards and procedures, equal to those of the company’s European plants.
There was little doubt since the Geely purchase in 2010 about the political outcome. The second assembly plant in Daqing is already under construction and the first prototype cars will be built later this year for training. The plant will be operational in 2014. The engine plant in Zhangjiakou will running this fall, and will deliver engines to Volvo Cars’ manufacturing plant in Chengdu. Zhangjiakou will also supply the assembly plant in Daqing.
The plants in Daqing and Zhangjiakou will be operated via two joint venture companies, where Volvo Cars initially will hold 30%. Companies within Geely Holding Group will hold the balance of ownership.
Now there is a joint development program underway with Geely that will see a Chinese market car appear in 2015.
“We have entered into the research and development stage and I believe we can see the new product in the year after next,” Geely Chief Executive Officer Gui Sheng Yue told reporters yesterday in Hong Kong.
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