Geely to acquire domestic brand alongside Volvo

The parent company of China’s Geely Automotive has said that it is to purchase local special vehicle maker, Zhejiang Zhongyu Automobile, as part of its portfolio expansion, according to a Reuters report. Geely, which is close to securing a deal for Ford’s Swedish brand Volvo, did not provided any financial details for the purchase of Zhongyu, a small manufacturer based in eastern China.

The Chinese government has prioritised the consolidation and development of some of its champion automotive firms, in what has become a highly fragmented sector, with over 100 producers.

Geely, the country’s tenth largest car maker, sold around 330,000 units last year. It said that it would use Zhongyu’s facilities and technology to develop its own premium passenger cars, multi-purpose vehicles and special purpose vehicles. It also plans to build a crash test center through an initial investment of $51m.

Zhongyu, which makes special-purpose vehicles based on Daimler expertise, was set up in 2004 and is currently owned by Zhejiang Zhongyu (Holding) Group.