Geely-owned Volvo Car is making a multi billion dollar investment in SPA (scalable product architecture) and VEA (Volvo engine architecture) and most work on the two projects will be in Sweden, one of the country's largest industrial investments.

The new, flexible, scalable product architecture will underpin most future car models and is shared modules and scalable systems and components manufactured in a flexible production system. A new four cylinder engine family will be built in Skövde and assembly of all drivelines, including hybrids will be at the Torslanda plant in Gothenburg.

"Almost half of the approximately US$11bn investments covering the years 2011 to 2015 will be spent in Sweden in the form of infrastructure for the new vehicle architecture and engine family. This is a proof of Volvo car group's determination to strengthen the company's position as a Swedish car maker with a unique attractiveness on the global market," said Hakan Samuelsson, president and CEO of Volvo Car.

About one-third of the spend in Sweden is earmarked for expansion and upgrades of production facilities. A 'significant sum' is being invested in the construction of the new body shop in Torslanda which will be completed during the second half of 2013.

There will also be spending on the body shop in Olofström which has to be modified for new car models based on new architecture. The Skövde engine plant will also undergo comprehensive changes for production of the engine family.

"SPA makes us technologically independent, without any link whatsoever to [previous owner Ford]. The new architecture covers about two-thirds of our total sales volume. With about 40% of all components shared by all car models irrespective of size, we will benefit from economies of scale, thus boosting our competitiveness," said Peter Mertens, who heads Volvo car research and development.

"With lower costs for development and parts designed to be shared by all our models, there will be more capacity left for focusing on individual details that are important to our customers."

The first car model based on the new architecture is the next-generation XC90 which will be launched at the end of 2014.