Geely building new plant to make 250,000 larger cars

The new capacity will enable Geely to produce roughly 250,000 more cars a year in Ningbo and add larger cars to its small-car-focused line-up, as well as ramp up launches at its new brand Lynk & Co.

BEIJING: China’s Geely is building a new plant to produce a quarter of a million bigger-sized cars that will help meet a goal of selling more than two million vehicles by 2020 and power its growth, two people familiar with the matter said.

Zhejiang Geely Holding Group Co, one of China’s five biggest carmakers, and the owner of Sweden’s Volvo Cars, is building the facility in the eastern port city of Ningbo where it already operates an assembly plant, as per the sources and information from a Geelyowned construction bidding procurement website.

The new capacity will enable Geely to produce roughly 250,000 more cars a year in Ningbo and add larger cars to its small-car- focused line-up, as well as ramp up launches at its new brand Lynk & Co.

Geely was once known for cheaper, copycat designs but has assumed upmarket aspirations after the Volvo deal. The capacity increase underscores its ambitions as well as the shift in customer preferences toward bigger vehicles in China, the world’s biggest auto market.

The plant will have two assembly lines. According to information on the Geely-owned website, the carmaker plans to spend 3.4 billion yuan (RM2.04 billion) for one of them. The overall investment planned for the plant was not immediately known.

Meanwhile, Toyota Motor Corp. is aiming to triple car production in China by as soon as 2030 in a renewed push to make up lost ground in the world’s biggest market, according to people familiar with the plan.

Asia’s largest carmaker is targeting to manufacture 3.5 million vehicles annually in China around that year while boosting imports to the country to half a million vehicles, the people said, asking not to be identified as the internal goal is private for now.

Toyota can currently produce 1.16 million cars in China annually, and sold 1.3 million there last year for a 4.5 per cent market share. Volkswagen AG and General Motors delivered more than four million each.

The foray comes as Chinese officials warm to the hybrid technology that Toyota pioneered with the Prius, amid a realisation that electric vehicles alone probably won’t be able to achieve Beijing’s ambitious environment targets, two of the people said. — Reuters