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Economy

Volvo aims to sell 200,000 cars in China by 2015

(Xinhua)
Updated: 2011-02-25 19:20
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BEIJING - Volvo Car Corp. announced Friday it will build two manufacturing bases in the west China city of Chengdu and northeastern Daqing over the next five years in an ambitious expansion that aims for car sales in China of 200,000 by 2015.

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"China is Volvo's second home ground and plays a vital role in Volvo's success," said Volvo chief executive officer and president Stefan Jacoby at a press briefing in Beijing.

"Our goal is to clinch 20 percent of the Chinese luxury car market by 2015," he said.

Jacoby said the establishment of the two manufacturing bases was endorsed by Volvo's board of directors, but was yet to be approved by the Chinese government.

Last month, the Swedish automaker announced the establishment of its Chinese headquarters and an attached technology center in Shanghai.

Jacoby did not give details about the two plants, but sources familiar with the investment said the Chengdu manufacturing base would cost Volvo 5.4 billion yuan (about $820 million).

The manufacturing base in Chengdu, capital of Sichuan province, would comprise a vehicle assembly plant, an engine plant and a transmission plant, said Li Hua, deputy director of the economic development zone of Chengdu.

The vehicle plant was slated to begin production by 2013 with an initial annual capacity of 100,000, Li said.

A vehicle resembling Volvo's popular model S60 would be assembled in the plant, Li said.

The manufacturing base would include Volvo's three western centers for research, parts and components procurement and marketing, Li added.

Volvo, formerly owned by Ford Motor Co., was taken over in August last year by privately-owned Chinese automaker Geely Holding Group for $1.8 billion.

The deal enabled the Hangzhou-based firm in East China's Zhejiang province to obtain advanced technologies from Volvo as well as the prestigious brand.

Volvo sales rose 11.2 percent year on year to 374,000 vehicles last year, Jacoby said, adding that the company aimed to raise global sales to 800,000 by 2020.

Volvo's sales in China went up 36 percent to exceed 30,000 last year, figures released by the company showed.

Jacoby said the company would strengthen its sales network in China by increasing 4S dealers from 106 to 220 to achieve the sales target of 200,000 by 2015.

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