Volvo factories to be placed in Chengdu, Daqing and Shanghai

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As reported on China Car Times many moons ago, Volvo has plans to set up new factories in Daqing, Chengdu and Shanghai, which will give Volvo a good spread of factories across China’s biggest market areas. If you’re wondering why on earth Volvo would set up shop in Daqing, then the answer is simple: Daqing Government’s coffers are full of oil money and they are looking to build a car factory in what is deemed China’s industrial rust belt.

From Trading Markets:

Volvo Cars, the Swedish carmaker taken over by China’s Zhejiang Geely Holding Group Co., determines to take China as its second local market besides Sweden and plans to build factories in Chengdu, Shanghai and Daqing.

Geely chairman Li Shufu airs that the delivery of the acquisition had been completed in the past over three months, and Volvo Cars’ new board and management made the decisions at the two conferences held.

Bernt Ejbyfeldt, a purchasing director with Volvo Cars, said at the month beginning that the 20 biggest suppliers provide around 70 percent of parts and components, and the carmaker planned to scale back its supplier base by 33 percent in a bid to lower costs and streamline manufacturing.

As early as the year beginning Li Shufu showed that Volvo’s biggest problem was small in scale and higher production costs compared with Benz and BMW. It did not rule out the possibility that Geely would reduce Volvo manufacturing costs by means of price cut.