Volvo to set up joint venture with Geely in China
It was initially reported that Volvo would be able to enter the Chinese market with its own production facilities as an independent company owing to its Chinese ownership at the hands of Geely, however according to our information the Chinese government still regards Volvo as a foreign company and requires it to have a partner prior to setting up a joint venture in the Chinese market. Geely, as Volvo’s owner, has stepped forward as the official partner to Volvo China.
Under the proposed agreement both Volvo and Geely will take a 50:50 share in the new company and will focus on producing Volvo’s in China and will also have a heavy focus on developing new energy vehicles and also a new sub brand. A Geely sub brand which would use Volvo platforms has long been rumored to be in development, but this is the first time that we have received solid news from Chinese media outlets.
Volvo has plans for multiple factories in the Chinese market which include Chengdu, Shanghai and Daqing City.
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Aren’t all of Volvos floorpans owned by Ford? In which case how will the develop a sub brand off Ford tech?
After purchasing Volvo, Li Shufu reassured skeptics with words like, “Relations between Geely and Volvo in the future will be like brothers, not father and son.”
Meanwhile over at Chang’an, assurances were given that the S40 and S80L models would continue to be produced in Chongqing under two contracts with Ford scheduled to expire in 2015 and 2018.
But what is sure is that their will be lively competition for the location of the main production plant. Bo Xilai of Chongqing does not want to lose Volvo, and the city of Daqing is expecting a major piece of the action in return for it’s help in making the purchase possible. As for all the expats, they’d love a location that has all the amenities of Shanghai.
The Volvo S80 and V70 mk1 which donated its floor pan to the XC90 and newer S80 all use Volvo’s own floor pan. Ford only donated the Mondeo platform for the current V70, Focus platform for the XC60, S40/V40 and C70.
The current S60, S80, and others share the same platform with the Mondeo and S-MAX.
The Current XC90 is built on a Pre-Ford Volvo Platform (P2). Ford, since their purchase of Volvo, as adapted this platform for multiple cars. The Current C30/S40/V50/C70 as well as the new V40 and any remaining facelifts to those models will be built on a platform that was jointly developed by Volvo, Ford and Mazda (P1). The current S60/XC60/XC70/V70/S80 models are all built on a platform designed by a Volvo led team that included Ford Europe (EUCD).
All future Volvo’s, starting with the 2015/16 XC90 will be built on Volvo’s new SPA (Scalable Platform Architechture). This is a platform designed – POST FORD – from the ground up. The new factories in China will produce SPA cars, not Ford Platform cars.