Zhejiang Geely Holding Group received approval to build a new plant to manufacture Volvo cars in Sichuan’s capital of Chengdu.
Zhejiang Geely Holding’s request to build a new passenger car factory in Chengdu was approved by the Ministry of Industry and Information Technology. Geely hopes that by purchasing Volvo vehicles it will be able to take the automaker’s brand and technology recognition and make future developments in the auto market. The Chengdu factory is worth 4 billion yuan ($631.48m) and it is expected to start production in 2013.
The facility features welding, painting, stamping and general assembly production lines and it will produce up to 500,000 units annually. The first two models scheduled to be manufactured here are Volvo’s XC60 luxury SUV and S60L luxury sedan. After the plant’s consolidation will be completed, The Ministry of Industry and Information Technology will analyze the site’s infrastructure, and then the Volvo vehicles produced here will be allowed to be sold in the country.
Volvo has previously announced its plans to sell 200,000 cars in China by 2016 and to expand its market share in the country, which was only 0.3% in 2011, to 20% in the following 4 years.