Swedish carmaker Volvo owned by China’s Zhejiang Geely Holding Group (0175.HKG), plans to invest $11.6 billion to develop new vehicles and to boost its manufacturing footprint in the next few years.
The company aims to acquire 20% of China’s premium auto market by 2015 and to increase Chinese deliveries to 200,000 by 2014.
Earlier in the day, German magazine Wirtschaftswoche said Geely would invest the money, butspokesman Per-Ake Froberg said that funding would come from Volvo itself and include financingfrom cash flow and borrowing.
“It is not Geely investing $11 billion,” he said.
Volvo and Geely Automobile Holdings also owned by Zhejiang Geely Holding, will also pool purchasing of parts and components and jointly develop small engines and technologies for electric vehicles, German magazine Wirtschaftswoche reported.
Last month, Stefan Jacoby, president and CEO of Volvo, told Reuters this week the company intended to make China “our second home market,” after Sweden.
The Zhejiang Geely Holding Group, based in Hangzhou, agreed to pay $1.8 billion for Volvo in 2010, with $1.6 billion in cash and the rest in a note payable to Ford.