Zhejiang Geely Holdings Group Co said on Wednesday that it plans to set up a joint venture with unit Volvo Car Corp in China and hopes to announce a project to develop and produce an indigenous brand of cars with Volvo in two months.

Geely, which bought Volvo Car in 2010 and controls Hong Kong-listed Geely Automobile Holdings Ltd, would set up a 50/50 joint venture with Volvo, spokesman Yang Xueliang quoted Chairman Li Shufu as saying.

Like other sino-foreign car joint ventures, the planned Geely/Volvo venture would develop and launch a self-owned brand and new energy cars in China, Li told reporters earlier this week.

Yang confirmed Li's remarks and said the two companies were expected to announce details of the own-brand car project in two months.

Geely and Volvo have applied to China's National Development and Reform Commission (NDRC) to set up the joint venture and hope to receive approval this year.

Under Chinese regulations, a Sino-foreign auto venture cannot produce only foreign car brands in China but must also set up research and development centres, and produce own-brand and new energy cars, an industry expert said.

Last year, Volvo announced that it would invest up to $11 billion in five years to speed up new product development and expand its global footprint.

It is building manufacturing plants in China's Chengdu and Daqing, with production scheduled to start in 2013.

Yang quoted Li as saying that since Volvo, the Swedish automaker bought by Zhejiang Geely, was regarded as a foreign brand by the NDRC, it was required to set up a joint venture before it could start production in China.