Volvo and Geely to expand their Chinese partnership

Nell Walker
- Lean - Nov 03, 2016

Swedish automotive manufacturer, Volvo, has announced that it plans to broaden its partnership with the Zhejiang Geely Holding Group.

The two companies are set to start production at their joint assembly plant in Luqiao, China, which will be operated by Volvo and create advanced compact cars equally developed between the two.

The cars will be based on the CMA (Compact Modular Architecture) platform for all markets, in order to create greater economy. According to Hakan Samuelsson, CEO of Volvo, at an announcement in Shanghai earlier this week, the partnership won’t dilute or jeopardise the identities of the two car brands.

Geely has owned Volvo since 2010, having bought it from Ford for $1.8 billion. It seemed an odd decision to many in the auto industry, but it appears to be working well. Sales for both are rising and the pair is cooperating in all aspects of business and manufacturing.

Volvo will also now be building its 60-series medium-sized cars at Chengdu as an extended part of its plan to create a broader global industrial footprint. The new China-built Volvo S90 luxury sedan, set to be unveiled properly at the Guangzhou Motor Show, will be the most premium car ever made in China.

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

 

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