Volvo Cars’ new China strategy and expansion

Volvo Cars, the premium car maker, has in November 2016 unveiled a new manufacturing strategy for China in which production capacity will be increased and a global manufacturing and export hub will be developed, servicing growing demand for its new range of cars in the US, Europe and Asia Pacific.

Pre-production of the new Volvo S90 in the Daqing manufacturing plant

Pre-production of the new Volvo S90 in the Daqing manufacturing plant

Volvo Cars will make its top-of-the-range S90-series cars based on its Scalable Product Architecture (SPA) at its plant in Daqing, Heilongjiang province, in northern China. In the future the production of the new S90 premium sedan will also be moved from Europe to China.

The Swedish company also announced that existing and future 60-series medium-sized SPA-based cars will be built at its plant in Chengdu, Szechuan province, in Western China, while its planned 40 series smaller cars, based on its Compact Modular Architecture (CMA), will be made at a plant that is currently being built in Luqiao, 350km south of Shanghai.

“With three plants – and the designation of one car line for each plant – Volvo creates an efficient production structure ensuring future capacity for growth,” said Håkan Samuelsson, president and chief executive.

The Luqiao plant, which is owned by Zhejiang Geely Holdings but operated by Volvo Cars, will make Volvo’s new range of smaller 40-series CMA-based cars, as well as CMA-based cars for LYNK & CO. This is the new car brand launched in October by Geely Auto.

Volvo’s expanded production capacity in China forms an integral part of its broader global industrial footprint.

Manufacturing plant in Luqiao, artist impression

Manufacturing plant in Luqiao, artist impression

Volvo currently operates two plants in Europe, in Sweden and Belgium. The Sweden plant in Gothenburg will continue to make 90 series and 60 series SPA cars while its plant in Ghent, Belgium, will in future be a CMA-only production facility making new 40 series cars.

Volvo has paved the way in developing China’s exports of locally made cars to global markets. It was the first Western car maker to export a premium China-made car to the US in 2015 with the S60 Inscription.

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