Reuters’ sources said that Volvo plans to make cars in Chengdu, China, where there is a huge market for luxury cars. This site is near Ford Motor Co.'s plant in Chongqing where Volvo models are also manufactured.
Zhejiang Geely Holding Group has been searching for a new Volvo production base since it took over the Swedish carmaker from Ford Motor Co. in August 2010, marking China's largest auto acquisition.
Several Chinese cities, including Shanghai and Daqing, since August 2010, have been competing for Volvo's China car plant, which could be a major boost to the local economy.
A source told Reuters that Volvo cars will be made in Chengdu and Shanghai will be Volvo's China headquarters and an R&D center.
Industry observers lauded Volvo's decision to establish its China plant in Chengdu, a fast growing luxury car market where Mercedes-Benz, Audi and BMW had set up shops years ago.
Jenny Gu, a J.D. Power Asia Pacific analyst, said the new Volvo plant already has a mature suppliers' base ready for it even before it starts operation. [via autonews - sub. required]