Ford Motor’s Volvo Cars unit is to manufacture cars in China for the first time, the Financial Times reported. The carmaker is to start producing the S40 sport sedan between June and August with partner Changan in Chongqing. After an initial start-up phase, annual production will be 10,000 units – nearly double the sales of imported Volvos in China last year. Volvo intends to localize production of popular models despite concern about overcapacity in the highly competitive industry. The S40 will have to compete with models from manufacturers that have already established production in China, including DaimlerChrysler’s Mercedes-Benz, Volkswagen’s Audi and BMW.