Volvo, owned by China’s Zhejiang Geely Holding Group, will invest 708 million U.S. dollars to build a second plant in China, the world’s largest car market, the environment ministry in Beijing said Friday.
Industry automaker, Geely bought last year, 4.58 billion yuan will flow into the plant in northeastern Daqing, with operations scheduled to begin in 2013, the ministry said in a statement.
The plant will produce 113K sedans, XC60 suv and capital unspecified “multi-purpose vehicle” with a total annual capacity of 80,000 units in 2015, according to the statement.
The project will receive the approval of the ministry after a period of one week ended Friday.
Geely, parent of Geely Automobile Holding listed on the Hong Kong stock exchange, buy Volvo from Ford, based in Sweden in August by 1.5 trillion U.S. dollars (1.2 billion euros at the moment).
He said he presented a plan in February to turn to China, which took over the United States as the world’s biggest auto market in 2009, into a major manufacturing base for Volvo with an investment of 11 billion dollars over the next five years.
Volvo chief executive Stefan Jacoby told reporters that the company intends to push China to sell 200,000 units of vehicles in 2015, nearly seven times the sales of 303,500 units last year.
In 2010, Volvo sold 373,525 vehicles worldwide, with sales up 29 percent in northern Europe and 36 percent in China.
The company also plans to build a first plant in the southwestern city of Chengdu.
Earlier this year, Volvo launched a China headquarters and research and development center in Shanghai, the financial center of the country in the east.