Volvo Weighs new Plant in China in Two Years

The Swedish auto maker Volvo, now owned by Chinese group Geely, wants to open a new assembly plant in China in two years, the Volvo chief executive said Monday.


“We are soon going to make a decision on the first plant,” Stefan Jacoby told the financial newspaper Dagens Industri.


“Production will begin in two years. We are waiting for approval from the authorities.”


Geely, which acquired the Swedish car maker from US giant Ford in August, said in September it planned to increase Volvo sales to 300,000 cars a year in China alone.


Geely head Li Shufu, who is also Volvo chairman, said he wanted three new Volvo plants in China to produce that volume.


Volvo said an agreement on the company’s “strategic direction” in China had been reached on December 9, with details on its application to be worked out at a meeting of the executive board.


Jacoby said the goal is to quickly expand annual sales in China to 100,000 vehicles from the current level of 30,000.


Volvo already builds its S40 and S80 models in China through a partnership between former owner Ford and Chinese group Chang’an.


Volvo employed 19,650 people in 2009, down from nearly 28,000 five years earlier, and Jacoby said the company planned to re-hire 500 workers in Sweden next year thanks to a rebound in sales.


Sales had fallen from a peak of 460,000 vehicles in 2007 to around 330,000 in 2009 before rising to 380,000 this year.


Geely, which paid 1.5 billion dollars (1.1 billion euros) for Volvo, hopes to double production over the next 10 years, mainly for the Chinese market.


 

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