Sweden's Volvo Cars confirmed it will build a new car plant in Chengdu, in China's Sichuan province, which is expected to become operational in 2013 with the capacity to make 100,000 cars per year.

Volvo currently relies on former parent company Ford Motor's joint venture with Chongqing Changan for local assembly of its S40 and S80 models for sale in China.

Under new parent company Zhejiang Geely, Volvo aims to double global sales to around 800,000 units within ten years.

China is key to it achieving its growth targets, with 250,000 units expected to be sold in that country by 2015, compared with just over 30,000 units last year.