Geely may build three Volvo plants in mainland China
Geely and its newly-acquired Volvo brand are likely to build three new assembly plants on the Chinese mainland in an attempt to raise the annual sales of Volvo cars in China to 300,000 units, said Li Shufu, chairman of the Zhejiang Geely Holding Group.
Li said that Volvo was profitable in the first half of 2010, which shows a strong market demand for Volvo products. The real challenge facing Geely is how to further expand the brand at home. Li said during the interview that Geely has considered building its third Volvo production base in Daqing.
He said if the plan is approved by the government, each of the three plants will have an initial output capacity of 100,000 units a year. The construction of the plants in Shanghai and Daqing will start from scratch.
According to earlier reports, Zhejiang Geely Holding Group and Volvo were considering building two car assembly plants on the Chinese mainland, one in Shanghai and the other in Chengdu. Furthermore, they will also build an independent motor plant in China.
Rapidly enhancing the influence of the Volvo brand is a key procedure of Geely's strategy to revive Volvo. Whether or not the plan can succeed relies on the market demand and government approval.
