Chinese automaker Geely said it had completed the acquisition of Swedish automaker Volvo from the Ford Motor Co for US$1.65 billion.
Geely said it would set up its Volvo Chinese headquarters in the Jiading District. It will include a research and development center, a sales hub and a procurement base.
The Chinese company plans to expand Volvo’s presence in China, the world’s largest car market, by marketing the cars as sturdy and “family friendly.”
Within five years, China is expected to become the biggest market for the Volvo brand.
Located at Jiading Industrial Zone, the Volvo project covers an area of 20 hectares, of which 100,000 square meters will be devoted to research and development. The area will also house a new Volvo Museum to highlight the history of the auto.
The project, which is still in the planning stages, will begin construction next spring and is expected to be completed in the second half of 2012.
The manufacturing base for Volvo will be located west of the Zhuqiao exit of the Jiajing Expressway.
Its annual output will eventually be 200,000 vehicles for both domestic and overseas markets.
Geely said its domestic models will cater to the motoring habits of Chinese consumers.
A workshop near the crossroads of Shengxinbei and Xingxian roads will be turned into a temporary research and development site employing up to 300 people. Work at the site is expected to start by the end of the year.
Since May, almost 80 executives from Geely have been working at the industrial zone preparing for the industrial handover.
Founded in 1927, Volvo was sold to Ford in 1999 for US$7 billion.
In China, Volvo’s S40 executive compact car and S80 saloon have been manufactured at a Ford-Mazda joint venture with Chang’an Motors in Chongqing, but Volvo sales in China have lagged far behind other foreign brand names.
Geely said Stefan Jacoby, who is currently the head of Volkswagen in America, would become Volvo’s new president and chief executive.