Geely wants to build three Volvo plants in China

Article by Christian Andrei, on September 15, 2010

In China, Zhejiang Geely Holding Group may build up to three plants to produce Volvo cars. Just last month, Zhejiang Geely, parent of Geely Automobile Holdings, completed its purchase of the Swedish brand.

Geely spokesman Ning Shuyong said that the company aims to reach a combined capacity of 300,000 Volvos a year in China.

Ning clarified that the plan still has to be approved by the Chinese government and Volvo’s board but that the possible sites for the three Volvo plants are the Jiading district on the outskirts of Shanghai, the southwestern city of Chengdu, and the northeastern city of Daqing.

In front of Hong Kong reporters, Li Shufu, chairman and founder of privately held Zhejiang Geely, said that there is no rush with regards to the final decision for the plants in China. When asked about the plants’ timetable, Li responded, “It may take years."

The purchase of the Volvo car brand marks China's biggest ever overseas auto acquisition. With the completion of the sale, Geely is now faced with the task of making Volvo profitable once again.

In 2009, Volvo Car Corp. recorded revenues of $12.4 billion with sales of 334,000 cars; however, it posted a pre-tax loss of $653 million.

Industry observers say that an essential part of Li's plan to turn around Volvo is major new investment. The new manufacturing facilities in China are expected to nearly double Volvo’s capacity so as to make the most of China's massive auto market. [via autonews - sub. required]

Topics: geely, volvo, china, factory

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