Volvo, whose Chinese operation has been embroiled in a row over misreporting sales figures, is expected to win full government approval to produce cars in the country from June, according to news reports.
Local production is seen as key in meeting Volvo’s ambitious plans to almost double global sales to 800,000 units by 2020.
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Volvo and parent company Geely have already started work on an assembly plant in the southwestern city of Chengdu, according to unidentified sources quoted by the Reuters news agency.
The sources requested anonymity because of the sensitive nature of the plant approval process.
The plant, which is close to completion, will have an annual capacity of 125,000 units.
Meanwhile, a senior Volvo executive has told Reuters that that some of its 150 dealers in China falsified sales in 2011 so that they could qualify for cash bonuses. To disguise what they had done, they then under-reported sales last year. This distortion led to an apparent 11% slump in Volvo sales to 42,000 units when, in fact, sales had risen by 15% to almost 46,000 units.
Reports suggest that the apparent poor performance in China was one of the reasons that Volvo sacked its CEO Stefan Jacoby last October.
