New Geely plant will use locally pressed body panels and other parts imported from Sweden to build XC Classic later this year

New Geely plant will use locally pressed body panels and other parts imported from Sweden to build XC Classic later this year

Volvo's upcoming XC Classic - the previous model XC90 - will be assembled in a new Geely plant in Daqing, China, from a mix of parts shipped from Sweden while larger parts such as body panels will be stamped locally using dies relocated from a Swedish plant, just-auto has learned.

It will not be a CKD kit assembly operation, the automaker stressed.

"The production of the XC Classic in Daqing is based on call-offs direct to the suppliers and we are not shipping kits," a Volvo spokeswoman confirmed.

"We will relocate the stamping dies for the bigger and important parts from Sweden (Olofstrom) to Daqing. The vast majority of parts will be shipped from our existing suppliers in Europe."

Swedish production - in Torslanda - of the old model, which ran for 12 years, ended in July. In total, 636,143 of the SUVs were built with production peaking at around 85,000 a year in 2004-2007. The vehicle was once named Sweden's most valuable export product, with an annual export value of more than SEK40bn (US$5.9bn) in its peak years.

Output of the next generation XC90 - revealed to global media near Stockholm on 26 April - is due to start at Torslanda next January. Production of the 'old' XC90, renamed XC Classic, will resume in Daqing from later on this year, for sale only in China.

Imported Volvos have been sold in China since the 1980s while the S40, which then shared its platform with Mazda's 3 and Ford's Focus, and the S80 were assembled for some years in China by a Changan Ford-Mazda joint venture plant during Ford's ownership of Volvo. That production arrangement continued for some time after Ford sold the Swedish automaker to Geely in 2010 until the new owner could arrange its own local production.

In the last year, Geely has been gradually ramping up local Volvo production starting with the China-only S60L long wheelbase sedan which began trial build at a new plant in Chengdu in June 2013. Series production began last November.

Volvo also has decades of experience of overseas assembly from CKD kits - its models were once assembled in Australia. Current CKD operations include Malaysia.

China has a strong local component base so just-auto expects local XC Classic content will increase over time. Geely also has an engine plant in Chengdu which could provide powerplants.

In an interview with just-auto after the new generation XC90 was unveiled in Sweden, Volvo's senior vice president of marketing, sales and customer service, Alain Visser, said the automaker was looking at increased production capacity in China.

"If you plan to sell 200,000 units (as part of the 800k by 2020 master plan the company is working towards), you build where you sell."