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Geely to build second Volvo China plant

Zhejiang Geely Holding Group has received approval from a Chinese ministry to build a second Volvo manufacturing plant in China, this one in a remote northeastern city that helped finance Geely’s purchase of the Swedish automaker, the Wall Street Journal reported. The Ministry of Environmental Protection said it had approved Volvo’s proposal to build an assembly plant in Daqing, an oil town in northeastern Heilongjiang province. The city government provided what Geely executives said was a “significant” portion of the US$2.7 billion that Geely spent last year acquiring Volvo. Volvo will invest RMB4.58 billion (US$708 million) to build the Daqing plant, which is scheduled to begin producing Volvo models including the XC60 car-SUV crossover in 2013. The plant’s annual production capacity is likely to reach 80,000 cars by 2015, said the ministry. Michael Ning, a Volvo spokesman in China, said the company’s plans still require approval from other Chinese agencies.

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