China's Geely, Volvo beef up strategy with new brand, plant

Shanghai: Volvo Cars and its Chinese owner are revving up their profile as they focus on selling premium cars in world markets. The companies announced a strategy Wednesday that includes a new factory to make vehicles based on a new shared platform, including vehicles for Geely's new "connected car" brand, Lynk & Co.

Volvo also said it will shift some production of its upscale sedan line from Europe to one of its existing factories in northeast China, from where they'll be exported globally.

It's part of Volvo Cars' efforts to step up competition with other luxury car brands both globally and within China, the world's No. 1 auto market, after it was bought by Zhejiang Geely Holdings in 2010.

The new plant will produce Volvo's new 40 series compacts based on its Compact Modular Architecture platform, which will also be used for Lynk & Co. vehicles, a brand Geely launched last month.

The factory, currently under construction in Luqiao, 350 kilometers south of Shanghai, is owned by Geely but will be operated by Volvo. The platform is one of just two underpinning Volvo's entire lineup.

They give the company flexibility to build a wide range of vehicle sizes and body styles so that it can compete economically with bigger rivals. Volvo also unveiled upgraded versions of its top-of-the-line S90 sedan, which will be built at its two-year-old plant in Daqing in China's northeastern Heilongjiang province.

Another Volvo factory in Chengdu in central Sichuan province produces midsize S60 cars, which the company started exporting last year to the United States in small numbers.

Volvo's factories in Gothenburg, Sweden and Ghent, Belgium will continue to make sedans, hatchbacks and sport-utility vehicles under all three model ranges.

"China will play an increasingly important part in our global manufacturing ambitions," Volvo CEO Hakan Samuelsson said in a statement.

"Our factories will deliver world-class products for export across the globe in coming years, contributing to our objective of selling up to 800,000 cars a year by 2020."