China approves production plan for Volvo, sources say

Article by Anita Panait, on March 20, 2013

The National Development and Reform Commission, China’s main industry planner, has approved plans by Volvo Cars to start building vehicles in the Asian country, three people privy to the matter told Bloomberg News. According to the sources, the NDRC has recently approved Volvo’s production plan, which still needs final approval from the State Council, or cabinet.

One of the sources said that the chances of the plan being rejected by the State Council are negligible. Volvo has said it is planning to open its first manufacturing plant in Chengdu, Sichuan province.

The approval has been much anticipated by Li Shufu, chairman of Volvo parent Zhejiang Geely Holding Group Co. Li made a gamble that he would have an edge in China when he acquired Volvo from Ford Motor Co. in 2010, only to discover that the Chinese government also made Volvo undergo the same regulatory procedures as all foreign carmakers.

Jaguar Land Rover, which established a Chinese venture with Chery Automobile Co. in 2012, did not wait that long to gain approval to build cars in China.

The approval of Volvo’s production plan means that the Swedish carmaker could soon sell cars at lower prices as vehicles built in China are not subject to a 25-percent import duty. China Car Times published an earlier report saying that Volvo had gained the NDRC’s approval for local car production.

Volvo posted a 31-percent jump in sales in China to 8,719 units in the first two months of 2013, making the country surpass Sweden as its second-largest market next to the United States.

Li remarked earlier this month he was confident that Geely's sales growth would perform better than the Chinese auto industry, which is expected to grow by around 10 percent in 2013. The carmaker has set a target of selling around 200,000 vehicles in China by 2020 from 41,989 in 2012. Volvo plans to invest $11 billion globally by 2016, much of which will be spent in China.

Topics: china, volvo, production

If you liked the article, share on:

Comments

Recommended

Skoda recently launched the new Karoq compact SUV as a replacement model to its now-defunct Yeti small crossover. Slotted below the newly introduced Skoda Kodiaq, the new Karoq features a...
by - May 23, 2017
There are already rumors suggesting that the next generation BMW 5-Series GT is expected to be joining the 6-Series range. The latest reports instead tell us that that 3-Series GT...
by - May 23, 2017
In 2004, the British marque Rolls-Royce officially entered South Korea with the opening of their showroom located in Seoul before opening their second showroom last September in Busan. Now RR...
by - May 23, 2017
In a game-changing move, Ford has revealed that it will soon produce its first ever all-electric CUV that will be built to be electric from the ground up, and it...
by - May 23, 2017
The wait for the Mustang’s GT-based Super Snake concept to be released is finally over. Shelby had recently collaborated with Ford Performance and Borla to come up with something that...
by - May 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries