Volvo to build its first Chinese assembly plant in Chengdu

Article by Christian A., on February 27, 2011

Swedish automaker Volvo Cars, which Zhejiang Geely Holding Group Co. bought in August 2010 for $1.5 billion, will build its first Chinese assembly plant in Chengdu, China, according to an unidentified person who claims to have direct knowledge of the plan.

Volvo’s supervisory board signed off on the new factory at a recent meeting, said the person, who asked not to be identified before the official announcement on Feb. 25, 2011.

The person added that Volvo plans to hold a ground breaking ceremony in Chengdu on March 1, 2011, marking the beginning of its factory construction.

Stefan Elfstrom, Volvo spokesman, has yet to comment. Before the board’s vote, spokesman Olle Axelson said that the Chinese factory could have an annual capacity of 100,000 cars and may open in early 2013. Volvo presently makes its S40 and S80L models for China at a factory co-owned by Ford and Chongqing Changan Automobile Co.

Ashwin Chotai, a London-based managing director of industry consultant Intelligence Automotive Asia, said that China will be the biggest contributor to meeting an 800,000 unit global target.

Chinese growth is vital to CEO Stefan Jacoby's aim to double sales to 800,000 cars in 10 years. Formerly owned by Ford Motor Co., Volvo Cars aims to sell 250,000 cars in China by 2015, up from 30,522 in 2010, spokesman Per-Ake Froberg said. [via autonews - sub. required]

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Topics: volvo, china, factory

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