Construction began last week. Upon completion in late 2012, the plant will double its annual production capacity to 100,000 units, said a company spokesman.

The Lanzhou plant currently produces only the Geely Free Cruise compact car. After expansion, it will also make models for the Geely's new Global Eagle and Emgrand brands.

In early 2009, Geely unveiled the Global Eagle, Emgrand and Shanghai Englon brands.

Global Eagle will target young customers with trendy compact models. Emgrand will offer a range of family cars, and Shanghai Englon will market the London Taxi and vehicles mainly for commercial use.

Geely plans to launch sedans, crossovers and SUVs for its new brands. But the company has not disclosed which models under the Global Eagle and Emgrand brands will be produced in Lanzhou.

The company's decision to expand Lanzhou reflects the Chinese auto industry's expansion into inland China. The western region lately has outperformed the prosperous coastal areas in terms of economic growth. Since 2008, automakers have been adding production capacity in this region to meet growing demand.

Geely is headquartered in Hangzhou in east China's Zhejiang province. The company has six assembly plants in China with a combined annual capacity of 400,000 units. Last year, Geely sold 249,650 cars, up 36 percent over the previous year, according to Automotive Resources Asia, a J.D. Power unit.

Besides the Lanzhou plant, it has three plants in Zhejiang, one in suburban Shanghai and one in central China's Hunan province.

Geely is expected to build a new assembly plant for Volvo Cars after it closes the deal in the third quarter of the year. In March, Geely signed an agreement with Ford Motor Co. to acquire Volvo.

Two Volvo models, the Volvo S40 and S80, are currently assembled at the Chongqing plant of Changan Ford Mazda Automobile Co., a joint venture among Changan Automobile Co., Ford and Mazda Motor Co.