Volvo Cars, the Swedish carmaker acquired by Chinaâ€™s Zhejiang Geely Holding Group Co., is leaning toward starting production in the city of Chengdu to boost sales in the country, according to a Volvo board member.
The board agreed at a meeting in Gothenburg yesterday that taking over an existing Geely Automobile Holdings Ltd. factory in the southwestern Chinese city and converting it to produce Volvo cars would be the cornerstone of Volvoâ€™s China strategy, said Marko Peltonen, who represents the IF Metall union on the board. No decision has been taken, he said.
Zhejiang Geely bought Volvo from Ford Motor Co. in August for about $1.5 billion. Expanding in China is key to Volvoâ€™s goal of doubling sales to 800,000 cars in 10 years, Chief Executive Officer Stefan Jacoby has said. Jacoby said in October that Volvo may need as many as three plants in China.
Volvo hasnâ€™t set a timeframe for a decision, Peltonen said. â€œDecisions also have to be made by local Chinese governments,â€ he said, adding that he doesnâ€™t know if the existing Geely production at the factory would be moved elsewhere.