Volvo is rumoured to be considering local manufacture in partnership with Chinese parent Geely but there is no official word yet

Volvo is rumoured to be considering local manufacture in partnership with Chinese parent Geely but there is no official word yet

With a limited quota of just 3,000 full imports a year, plus the strict Inovar-Auto government auto policy rules to contend with, there are rumours locally that Volvo and its Chinese owner Geely are considering building a car manufacturing plant in Brazil.

The automaker keeps denying the possibility yet there might be no alternative for it to remain present in a market that, despite the recent downturn, remains among the four or five biggest in the world.

One possibility is sharing an assembly line in Brazil, as VW and Audi already do. The Sino-Swedish group's CMA architecture would enable assembly of multiple models on one line - as VW Group does with MQB platform-based cars - making the investment more profitable.

Geely, which currently imports the CG2 subcompact from Uruguay and the EC7 compact-medium from China, faces even more severe limitations than Volvo to compete here.

The state of Santa Catarina, where a BMW assembly plant and a GM powertrain factory are already established, is the likely choice of assembly plant location, according to local speculation.