Zhejiang Geely Holding Group owned Volvo Car Corporation on Friday said it would consider a second car manufacturing plant in Daqing, China, as well as the one planned for Chengdu.
“We regard the Chinese market as the second home market and a very important part of the plan to build a successful future for the company,” said Stefan Jacoby, president and CEO.
Chairman Li Shufu said: “We have developed a solid plan for future growth in the strategically important Chinese market.”
A new headquarters has been established in Shanghai, including a technology centre and all functions for purchasing, design, sales and marketing, manufacturing and finance.
“We are increasing our business presence in China from a national sales company to an organisation with all functions necessary to manage our operation in China,” said Jacoby. “Our aim is to reach a sales volume of about 200,000 cars in the Chinese market by 2015.”
Pending local authority approval, Volvo will build the plant in Chengdu, 1,600 km (1,000 miles) west of Shangha to produce only Volvo cars. The plant is based upon a business case of approximately 100,000 produced cars annually and production is estimated to start during 2013.
The expansion in China will not affect operations and employment in Europe.
The board also approved a decision to continue investigating the opportunities for establishing a plant in Daqing in north-eastern China.
Shanghai will serve as Volvo Car China headquarters and centre for product development, design and sourcing. It will also help R&D in Sweden regarding the development of electric vehicles and hybrids.
The dealer count will expand from 106 to 220 by 2015.
The automaker will optimise its sourcing network in China for the global market.
It will employ new staff to work with product development for the Chinese market and support local production and purchasing.
“Our production in China will, however, not have any impact on decisions affecting capacity utilisation of our plants in Sweden and Belgium,” said Jacoby.
Lars Danielson, previously general manager of the Volvo Torslanda plant in Sweden, has been appointed head of industrial systems including manufacturing and quality. He is now based in Chengdu and is currently planning the plant.
Li Shufu added: “We continue to uphold our principle that Geely is Geely and Volvo is Volvo. A more globalised, more focused luxury brand will turn our vision of a growing and profitable Volvo Car Corporation into reality. The company will continue to contribute to the development of the global automotive industry by introducing world-first innovations that make an outstanding brand win in the marketplace.”