Geely to quintuple capacity to 1.5M vehicles by 2015

Shanghai, March 4 (Gasgoo.com) Chinese automaker Zhejiang Geely Holding Group Co., a potential buyer of Ford Motor's Volvo unit, plans to quintuple its annual domestic production capacity to around 1.5 million vehicles by 2015, AsiaPulse reported today.

Geely plans to begin assembling Volvo cars in China after it wraps up the deal to buy the brand from Ford Motor in the second quarter of the year. It has also agreed to acquire special vehicle carmaker Zhejiang Zhongyu Automobile Co.

Previously known as a maker of small, low-priced cars, Geely hopes to use these acquisitions to boost its capacity for making luxury cars and commercial vehicles. It is researching new energy cars, developing clean tech vehicles as the government is rolling out incentives to promote such technology.

Geely plans to invest 350 million yuan ($51.28 million) initially to set up a technology center in Hangzhou, capital of Zhejiang province, to expand the company's R&D base. That operation will eventually be used for the local development of Volvo cars.

Zhongyu Auto has two production bases with a combined capacity of 125,000 cars a year. Geely plans to assemble Volvos domestically and may use the Zhongyu facilities first for that purpose while building a Volvo plant in Beijing.

In addition, Geely will enlarge its factory in western China's Lanzhou city, expanding the production lines for large sedans and boosting capacity to 120,000 units a year by 2012, up from current 50,000.

In 2009, Geely Auto, the Hong Kong-listed subsidiary of Geely Holding Group, sold 325,413 cars, up 59%. Its 2010 sales goal was fixed at 412,000 vehicles, with over 20 new models to release.