Volvo may export “made-in-China” vehicles image

Three years after being under control of Geely Holding Group, Volvo Cars will begin production of vehicles at its first factory in China, a move that will allow the automaker to avoid a 25 percent import tax.

In addition, according to CEO Hakan Samuelsson, the company may eventually export some “made-in-China” vehicles to Asia and other regions.

Volvo’s new factory located in the southwestern city of Chengdu is almost ready and it is currently manufacturing a limited number of vehicles to test the production process and the quality. The automaker plans to begin full production during the fourth quarter, when the plant will manufacture 125,000 vehicles annually and will employ around 2,500 employees. The Chengdu site is Swedish manufacturer’s first factory set up outside of its native Sweden since 1969.

Volvo, considered one of the best car in terms of safety sold 22,905 vehicles through the first five months of this – up by 27% from a year ago. However, the company announced a loss last year as global sales fell 6.1 percent to only 421,951 vehicles, with the biggest decline in its home country – Sweden.

The automaker plans to sell 800,000 cars by 2020. In 2010 the company sold 373,000 vehicles.

China is Volvo’s second largest market after the United States, a market where the premium brand competes with Jaguar, Audi and BMW.