Volvo and Geely to share a plant in China

Volvo and Geely to share a plant in ChinaSwedish automaker Volvo on Wednesday revealed a plan to deepen cooperation with its Chinese parent Zhejiang Geely Holding Group.

Volvo's global chief executive Hakan Samuelsson and Geely Chairman Li Shufu confirmed the two firms will soon start producing cars at a joint assembly plant in Taizhou, in eastern Zhejiang province.

The plant is operated by Volvo. It is planned that it 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 (CMA) platform - for both domestic and export markets.

Volvo is trying to create "synergies and economies of scale", Samuelsson said in Shanghai on Wednesday, "by sharing development-intensive components: engines, transmissions, suspension parts and brakes", and by sharing manufacturing facilities.

The effort won't "dilute" or "jeopardize" the identities of the two car brands, he said.

On Wednesday, Volvo also unveiled two stretched variants of its recently launched large S90 premium sedan, including the S90 Excellence. It will build both S90 variants at its assembly plant in Daqing in northeastern China, for sale in China and abroad.

Samuelsson and other Volvo officials said Volvo will make China a global production hub for the S90 and its long-wheel base variants. While some production of those cars will likely remain in Europe the company over time will produce in China a majority of those cars it sells globally.

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

The Taizhou plant will be Volvo's third assembly site in China, along with Daqing and one in Chengdu in western China. The car maker also has two plants in Europe, and is building a new plant in South Carolina in the United States.
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