Volvo Approved to Build Cars in China

Will building cars in China help Volvo with its ambitious plans for growth?

In 2010, Swedish carmaker Volvo was bought by Chinese carmaker Geely. Now, Volvo has officially been approved to build cars in China thanks to full approval of its three production facilities, including plants in Chengdu, Daqing, and Zhangjiakou.

The Chengdu plant in the Sichuan province, which was previously a Geely facility, will be operated under an extension of the existing manufacturing license held by Geely. Chengdu will be the first plant to begin production in the fourth quarter of 2013, starting with production of the China-only Volvo S60L, a long-wheelbase version of the S60 sedan. The Zhangjiakou plant will be an engine plant supplying both the Chengdu and Daqing plants, also starting in the fourth quarter of 2013.

The Daqing plant is still under construction, and Volvo says it should be fully operational by sometime next year, with pre-series cars being produced later this year for training purposes. Both the Daqing and Zhangjiakou plants are operated as joint ventures; Volvo will initially hold 30 percent in this project, with various Geely Holding Group companies holding the rest.

It is unclear at this point whether Chinese-built Volvos will be sold exclusively in China, but the Chinese market is an important one for Volvo. The company has previously expressed intentions to sell 250,000 cars in China by 2015, which was then revised to 200,000 units by 2018. These goals play a significant role in the company’s larger global goal of 800,000 annual sales by 2020.

All of the vehicles that Volvo currently sells in the U.S. are produced in Sweden or Belgium, and we don’t know whether Volvos produced in China could possibly be exported to the U.S. in the future. No Chinese-made vehicles are currently sold in the U.S., but Honda does export Chinese-built versions of the Fit to Canada. Volvo says its Chinese plants will be in full accordance with the same manufacturing standards applicable in the company’s European plants.

Keep an eye out for Volvo in China to see if its increasing presence in an expanding market can help the brand with its lofty goals for the future.

Source: Volvo

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