Volvo Car, owned by China’s Zhejiang Geely Holding Group, will spend US$708m to build a second plant in China, the environment ministry in Beijing said.
The automaker, which was bought by Geely last year, will pour CNY4.58bn into the plant in northeastern Daqing, with operations scheduled to begin in 2013, AFP reported, citing a ministry statement.
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The plant will produce 113K sedans, XC60 sport utility vehicles and an unspecified model of multi-purpose vehicle with total annual capacity of 80,000 units by 2015, according to the statement.
The project will receive the ministry’s approval following a one-week notice period that ended on Friday.
Geely, parent of Hong Kong-listed Geely Automobile Holdings, bought Volvo from Ford in August for US$1.5bn (EUR1.2bn at the time).
It unveiled a plan in February to turn China, which overtook the United States as the world’s largest auto market in 2009, into a major manufacturing base for Volvo by investing $11bn over the next five years.
Volvo’s chief executive Stefan Jacoby told reporters then that the company aims to boost China sales to 200,000 units by 2015, nearly seven times the 30,500 sold last year.
In 2010, Volvo sold 373,525 vehicles worldwide, with sales rising by 29% in northern Europe and 36% in China.
The company also plans to build a first factory in the southwestern city of Chengdu, AFP noted.
Early this year, Volvo launched a China headquarters and research and development centre in Shanghai, the nation’s financial hub in the east.
