Geely may co-op with Changan on Volvo production

Shanghai, April 8 (Gasgoo.com) After buying the Volvo brand from Ford Motor, Geely Group may seek cooperation with the U.S. automaker's China partner on local production of Volvo cars, saying Changan Ford Mazda will continue to make Volvo S40 and S80 models for some time, media reported.

As Ford Motor's Chinese partner, Changan Auto is so far Volvo's sole production and technology partners in China, producing the S40 and S80L, two major Volvo-branded car models, at Changan Ford Mazda, its three-way joint venture with Ford Motor and Mazda Motor for making Ford, Mazda and Volvo cars.

Earlier this month, a few days after signing the Volvo deal with Ford, Geely Chairman Li Shufu said that the Volvo production contract between Changan Ford and Volvo will remain in place. Under the contract, Changan Ford can make the Volvo S40 sedan till 2015, and the S80 until 2018.

The S40, as the first Volvo car model built in China, hit the Chinese market in July 2006. On March 12, 2009, Volvo customized another lengthened homemade model, the S80L, for local consumers. Sources said the Volvo S60 will also be built by Changan Ford under a signed 10-year deal.

Geely, which has acquired a 100% stake in Volvo recently, is expected to discuss with Changan Auto and its venture with Ford about the new partnership in Chinese production of Volvo models, hoping to make the Volvo project profitable as soon as possible.

Volvo set up its Beijing office in January 1994 and then its China sales division in Shanghai in 2008. Now Volvo has over 90 dealerships in 78 Chinese cities. Up to 22,405 Volvo cars were sold in China last year, up nearly 80%.