Geely Automobile Holdings (GAH) has announced plans to launch its first jointly-developed car with Sweden’s Volvo Cars in mainland China as early as 2015, as it tries to compete with foreign branded vehicles in its home market.
GAH’s parent company, Zhejiang Geely Holding Group Company, acquired control Volvo Cars from Ford Motor Company in 2010 for USD1.8bn. Shortly after the acquisition, Geely and Volvo signed a memorandum of understanding (MoU) allowing the Chinese company “full access” to Volvo’s vehicle and manufacturing technology.
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Geely’s CEO Gui Sheng Yue told reporters in Hong Kong this week that “research and development” on a new model has already begun, following construction of a new joint R&D centre at Volvo’s Swedish headquarters in Gothenburg.
The first model to be jointly developed is expected to be a compact car, to be sold under the Volvo and Geely brands and with varying specifications to cater for different price levels.
Zheijang Geely has set a mainland China annual sales target for the Volvo brand of 800,000 units by 2020. By this time, a full range of Volvo cars are expected to be produced across three plants in the country.
