Volvo's new Chengdu factory gains official approval

Gasgoo.com (Shanghai August 31) - The Ministry of Industry and Information Technology has officially approved Zhejiang Geely Holding Group's request to establish a new passenger automobile factory for Volvo vehicles in Sichuan's capital of Chengdu, wccdaily.com.cn reported today.

By purchasing Volvo Cars, Geely hopes to take advantage of the Swedish manufacturer's technology and brand recognition to make further inroads in the passenger automobile market. The four billion yuan ($631.48m) Chengdu factory is scheduled to begin production in 2013. It is equipped with stamping, painting, welding and general assembly production lines, and can produce up to 50,000 vehicles a year. Both Volvo's XC60 luxury SUV (pictured) and S60L luxury sedan are scheduled to be manufactured at the site.

The MIIT will conduct an examination of the site's infrastructure once construction is completed, after which Volvos produced at the site will be allowed to be sold in the country.

Volvo executives have previously stated their intent to sell 200,000 vehicles in China by 2016. The manufacturer hopes to expand its controlled market share, which was reported to be only 0.3 percent last year, to 20 percent by that time. In order to achieve these goals, Volvo needs to be able to produce its vehicles in the country without any problems.