Volvo’s Daqing factory receives approval

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According to Chinese media reports from early this morning Volvo’s proposed factory in the frozen hinterlands of DaQing has already received approval from State Legislators and regulatory bodies. The factory will cover 84 hectare of land and will produce Volvo’s high end SUV range and also an unknown MPV, initial production ability will be limited to 30,000 sedans, 40,000 SUV’s and 10,000 MPV’s, production of these vehicles is scheduled to begin in 2013 once the factory is complete.

The S60 and XC60 SUV are to be built in Volvo’s Chengdu factory, the XC60 is likely to be built in both factories to meet demand and to also counter for a lack of models in the Volvo line up.

Daqing City, located close to the Russian-Chinese border is an unlikely place for a car maker to set up home, however Daqing is an oil rich city and used its oil money to invest in Geely’s takeover of Volvo which the city is using wisely to develop a secondary car making industry to soften the blow when local oil sources begin to dry up. The speed at which the venture has been approved is very surprising as other foreign companies have been forced to wait several months or even years before getting the go ahead to produce cars in China or expand their local factories.

In the next four years Volvo are aiming to sell 200,000 cars in the Chinese market and take 20% of the luxury market which will no doubt help Geely recoup their investment in the Swedish brand, by 2020 Volvo are aiming for world sales of 800,000 units.