Volvo and new Chinese owner Geely are still talking about increased production of the Swedish models in China despite talks of a rift between the two. 

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Geely, which acquired Volvo from Ford in August, said in September it planned to increase Volvo sales to 300,000 cars a year in China alone, building three new Volvo plants in the country.

However, the Financial Times reported last week that Volvo’s management wants to hold off on expansion until they can put together the right business case. Discussions were described as “heated, not acrimonious”.

Volvo spokesman Per-Aake Froeberg told Agence France Presse that Volvo and Geely were in talks over expansion in China and that management would take a decision on “the first step of localised production in China … within a couple of months.”

He added: “It’s a natural thing that there are discussions about such an important matter as the Volvo car strategy for China.”

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When Geely and Ford closed Volvo’s purchase in August, the Chinese company’s chairman Li Shufu said Volvo would remain true to its core values of safety, quality, environmental care and modern Scandinavian design.

He added the brand would strengthen the existing European and North American markets and expand its presence in China and other emerging markets.

Froeberg said: “Li has a very strong belief in the future of Volvo in China and has a vision of up to three factories over a long period. That doesn’t mean that he thinks decisions should not be based upon a firm and sustainable business plan.”

Volvo currently builds its S40 and S80 models in China, through a partnership between former owner Ford and China’s Chang’an. The brand is set to sell around 30,000 Volvos in China this year, half of which are imported.