China's Geely Holding Group, Ford's preferred buyer for its Volvo unit, wants to double Volvo sales to around 1m units a year as part of its turnaround plan for the loss-making division.

The Wall Street Journal reported that under the plan, Geely would build a new Volvo plant in China with annual capacity of 300,000 vehicles a year to draw on China's market potential and inexpensive labour.

Geely would also add two or three bigger, more luxurious cars to Volvo's lineup over the next three to four years, which it hopes would boost global sales, according to the report which quoted a Geely source.

The more sophisticated engineering development for new models would remain in Sweden.

Geely believes Volvo has the potential to sell 200,000 cars a year in China, up from 12,600 vehicles last year. It forecasts selling nearly 1m cars a year globally within four or five years, compared with recent annual sales of around 400,000 units.

But Geely executives admit that securing the US$2bn deal to buy Volvo will be tough because of the complications over intellectual-property issues, including what technology Ford would transfer to Geely, how Ford would continue to use Volvo technology and how the two companies would handle any possible future disputes over technology.