Volvo, Geely share car plant

Two au­tomak­ers will soon start producing ve­hi­cles at their joint Taizhou fac­tory

China Daily (USA) - - BUSINESS - By REUTERS in Shang­hai

Volvo’s S90 news con­fer­ence in Shang­hai on Wed­nes­day.

Swedish car­maker Volvo an­nounced on Wed­nes­day a se­ries of moves deep­en­ing co­op­er­a­tion with its Chi­nese par­ent Zhe­jiang Geely Hold­ing Group Co — a tie-up that’s shap­ing up to show that China can make a suc­cess of buy­ing con­sumer brands.

The two firms will soon start producing cars at a joint assem­bly plant in Taizhou, Zhe­jiang prov­ince, Volvo said in a state­ment.

The Taizhou plant, op­er­ated by Volvo and ex­pected to be up and run­ning in the cur­rent quar­ter, will pro­duce com­pact cars based on an “ad­vanced” ve­hi­cle ar­chi­tec­ture the two com­pa­nies have jointly de­vel­oped in Swe­den.

Both Volvo and Geely are ex­pected to pro­duce small cars at the plant based on that com­pact mod­u­lar ar­chi­tec­ture plat­form — for both do­mes­tic and ex­port mar­kets.

Volvo be­gan ex­port­ing its China-made cars last year, ship­ping its S60 In­scrip­tion to the United States.

The au­tomaker is ex­pected to un­veil also two stretched vari­ants of its re­cently launched large S90 pre­mium sedan, in­clud­ing the S90 Ex­cel­lence. Volvo will build both S90 vari­ants at its assem­bly plant in Daqing in north­east­ern China, for sale in China and abroad.

The Taizhou plant will be Volvo’s third assem­bly site in China, along with Daqing and one in Chengdu in south­west­ern China.

Geely raised auto in­dus­try eye­brows when it bought Volvo for $1.8 bil­lion six years ago. Few saw any ob­vi­ous syn­er­gies in mar­ry­ing a pre­mium West­ern mar­que with a Chi­nese en­try brand.

But the two mak­ing it work. ap­pear to be

Volvo in­creased its thirdquar­ter sales in both China and the US by more than one-fifth, and July-Septem­ber op­er­at­ing profit jumped 62 per­cent to 2.07 bil­lion Swedish Kronas ($232.5 mil­lion).

Geely sold more than half a mil­lion cars last year, up 22 per­cent, and sales in the first nine months of this year were al­ready at nearly 460,000 cars.

“Mov­ing pro­duc­tion from Swe­den to China, and shar­ing man­u­fac­tur­ing pro­cesses and com­po­nents has been a pos­i­tive for both Geely and Volvo from a cost sav­ings per­spec­tive,” said James Chao, Asia-Pa­cific chief for con­sult­ing and re­search firm IHSMarkit Au­to­mo­tive.


Li Shufu (left), chair­man of Zhe­jiang Geely Hold­ing Group, and Hakan Sa­muels­son, pres­i­dent and chief ex­ec­u­tive of­fi­cer of Volvo, at­tend

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