Volvo has got the go-ahead from the Chinese government for its carmaking project in Daqing, Heilongjiang, where production is scheduled to begin towards the end of this year, says the city’s Development and Reform Commission. The first Volvo vehicle to be made in Daqing will be the XC60 compact SUV, according to several other sources.
Called Volvo Car Asia-Pacific Manufacturing Co., Ltd., the Daqing-based venture is the parent of Geely-Volvo’s factory in Chengdu, which will roll out S60L sedans in the second half of this year. The vehicle plants in both places will be matched by the engine plant in Zhangjiakou, Hebei, and a R&D center in Jiading, Shanghai.
To build Volvo cars in Daqing is part of the deal reached between the city and Geely when the two paired up to buy Volvo Car in 2010. For that acquisition, which cost about 1.8 billion US dollars, Daqing, which used to be the hub of China’s oil industry, contributed an amount between 700 and 800 million US dollars (the city of Shanghai also participated in the buyout).
Daqing planned the Volvo factory on a land of 833,000 square meters. In the first phase, an annual production capacity of 80,000 units will be created with an investment of 4.56 billion Yuan, while the long-term goal is to raise the capacity to 300,000 (the designed annual production capacity of the Chengdu factory is 120,000 in 2015). The product line is to include sedans, SUVs, and MPVs, some of which are to be electric or hybrid models. From the city’s announcement we also learned that besides Volvo, models of a new, China-only brand will be made here, which would be comparable to BMW-Brilliance’s Zinoro.
The facelifted XC60 for the 2014 model year, which is to be the first Daqing-made Volvo car, has been exposed in road tests in China since last year and made an official appearance at the recent Shanghai motor show. Local production is expected to lower the SUV’s prices by about 100,000 Yuan–to the range of 300,000-500,000 Yuan.