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By Andrew Ganz

Shortly before acquiring Swedish automaker Volvo from Ford last month, Geely announced that its expansion plans for Volvo would include an assembly plant in China primarily to serve the world's fastest growing market. Now, the automaker says that it might build as many as three Volvo assembly plants in China.

No firm decision has been made, however, as Volvo's board of directors and the Chinese government both need to approve additional assembly plants in China. In addition, Geely chairman Li Shufu says that there is no great sense of urgency in adding more plant capacity yet.

"It takes time," Li told Reuters. "It may take years."

Three plants, a Geely spokesman said, would give Volvo the capacity of around 300,000 units annually in China - that could help to nearly double Volvo's 2009 global sales of 334,000 units. It's not expected that any of the plants would supply Volvo markets outside of China; Geely has indicated that it has no plans to dismantle Volvo's Torslanda, Sweden, and Ghent, Belgium, plants.

According to the Geely spokesman, the company is looking at the Jiading district on the outskirts of Shanghai, the southwestern China city of Chengdu, and the northeastern China city of Daqing for the plants.



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Geely may build 3 new Volvo plants in China

September 14, 2010 06:16 CET

BEIJING (Reuters) -- Zhejiang Geely Holding Group, which last month completed its purchase of Volvo Car Corp. from Ford Motor Co, may build as many as three plants in China to produce the Swedish brand's cars.

If the plan goes ahead as expected, it would give Zhejiang Geely a combined capacity to make 300,000 Volvos a year in China, Geely spokesman Ning Shuyong said.

Possible locations of the three Volvo plants are the Jiading district on the outskirts of Shanghai, the southwestern city of Chengdu, and the northeastern city of Daqing, said Ning, adding that the final plan still needed the approval of Volvo's board and the Chinese government.

Li Shufu, chairman and founder of privately held Zhejiang Geely, also told reporters in Hong Kong he is in no hurry regarding the final decision for Volvo's China plants.

"It takes time," Li said when asked about the timetable for the plants. "It may take years."

Zhejiang Geely, parent of Geely Automobile Holdings, completed its purchase of the Volvo car brand in August, marking China's biggest ever overseas auto acquisition.

With the deal now completed, Geely faces the challenge of restoring Volvo to long-term profit. Volvo Car Corp. had revenues of $12.4 billion in 2009 by selling 334,000 cars, but it recorded a pre-tax loss of $653 million.

Major new investment is a critical part of Li's plan to turn around Volvo, including new manufacturing facilities in China that would nearly double the Swedish carmaker's capacity to take advantage of China's vast auto market, industry observers said.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100914/ANE/309149985/1131#ixzz0zW74SeEy

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