By on August 23, 2013
Pilot production begins at Volvo's Chengdu plant in China

Pilot production begins at Volvo’s Chengdu plant in China

Geely Automobile Holdings Ltd., owned by the same Chinese company that bought Volvo Cars in 2010, announced that it will soon start developing cars jointly with the Swedish company. The cars will be intended for the Chinese and export markets and will go on sale in 2015. Geely has ambitions to be China’s largest car exporter. Working jointly with Volvo is seen as giving Geely products some of Volvo’s reputation for safety and reliability.

“We have entered into actual research and development stage and I believe we can see the new product in the year after next,” said Geely Chief Executive Officer Gui Sheng Yue yesterday in Hong Kong.

Zhejiang Geely Holding Group Co., bought Volvo from Ford for $1.8 billion and last year the two companies signed a memorandum to “leverage its full access” to technology to develop vehicles. Earlier this year, Volvo announced that it was going to build a joint R&D center with Geely in Gothenburg. Volvo has also started assembling test builds at its first factory in China, in Chengdu, which will have an annual capacity of 120,000 cars.

Volvo Cars also announced today that it has received approval from the Chinese national government to build two more factories in China. The assembly plant in Daqing, in northeast China, will have a capacity of 80,000 units a year and is hoped to be fully operational some time next year. The facility in Zhangjiakou will be an engine plant and it will supply the Chengdu assembly operation where actual production will begin in Q4 2013. The two assembly plants are not expected to reach capacity for a few years.

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30 Comments on “Geely & Volvo to Jointly Develop Cars, Volvo Pilot Production Begins in Chengdu, Two More Chinese Volvo Factories Approved...”


  • avatar
    Lampredi

    Volvo plant workers in Sweden ought to be worried, as it’s just a matter of time before they’re out of a job. Chinese workers can do their job at a fraction of the cost.

    • 0 avatar
      Lorenzo

      Chinese workers have been demanding, and getting, bigger paychecks, so the difference is smaller than you might think. Swedish national health care and especially proximity to the European market (such as it is) are great equalizers.

      My question is whether the first “serious” Chinese-built car to be imported to America is a Volvo, or will Swedish-made Volvos be shipped here instead to keep the Swedish plant operating at capacity? I’m guessing the latter, to keep the Volvo reputation intact in the American Market.

  • avatar

    I think we are seeing the demise of the Volvo Car we all loved for so many years and yes they will all built in China and sold to us at a High price.

    • 0 avatar
      28-Cars-Later

      They wouldn’t sell well in NA if this were the case. Look at how the GM “Government Motors” stigma hurt them and helped Ford in the same period. If Geely shut down Gothenburg and be the first to export Chinese assembled cars to NA they’d get a similar stigma. Its not as if Volvo is even a relevant brand to begin with at this point who can afford to lose sales based on politics or perception, doing such would kill them here.

      • 0 avatar
        jeffzekas

        Most folks won’t care about the Chinese ownership- all North American Golfs are built in Mexico, yet the ads tout “German” engineering. So, like VW, you will pay for the “Swedish” name for safety but you will have Chinese quality and reliability (which, judging by Chinese scooters, will be non existent).

  • avatar
    Tostik

    Every major car company has factories in China.

    • 0 avatar
      Lorenzo

      Yes, but the ones with no quality issues have their own managers and extensive quality control in those factories. Smaller companies that worked with Chinese firms with no oversight found their products being jobbed out to small outfits using shoddy materials and poor assembly quality.

  • avatar
    Kenmore

    How I’d love to be a Volvo exec right now so I could launch a contest:

    250 mL of powdered tiger penis aphrodisiac to the first Chinese who could pronounce Gothenburg like a Swede.

    And since I learned to think like a Chinese from months & months of exposure to them, the powder would actually be ground carpet pad from a remodel of mitt eget hus. It’d have the right kind of ‘organic’ squooshiness.

    • 0 avatar
      atlas_snored

      ^class all the way

      We should be talking about the automotive industry. Leave the racist caricatures at home–or at least migrate to stormfront.org.

      • 0 avatar
        rentonben

        I suggest some 合歡皮 – it might help from being perpetually offended.

      • 0 avatar
        Francois

        Don’t be such a sensitive douchebag. How about you ignore him if you don’t like the comment. The world already has enough PC police to keep the world safe for those that get the vapors easily.

        • 0 avatar
          atlas_snored

          Say something offensive, then blame those who complain about offensiveness.

          The funny thing is, racist/hateful caricatures do tend to backfire on themselves. One can only cite the former Bertel Schmitt as an example. The individual car manufacturers who advertise on this site may be coolly indifferent, but they don’t want to be associated with a gong show of turds. You won’t see any advertising on stormfront.org.

          On a more base level, the constant low-level racism is reflective of some weird self-hatred. The contempt towards the out-group is just an easy projection of their own issues.

  • avatar
    tresmonos

    Volvo will be cannibalized by the Chinese only if the Swedes can’t engineer their way out of a wet paper bag.

    Production? Yeah kiss that good bye. Why the hell would anyone pay an over privileged A hole $50/hr to put stuff together when you can go 1000 miles east and do it for a 1/5 of the cost.

    • 0 avatar
      Lorenzo

      But it’s 4,000 miles, longer by ship if you’re selling in Europe. The Germans bring their managers, inspectors and quality control procedures to China to assure quality. The Chinese will likely need that Swedish expertise or the marque’s quality/safety reputation will quickly disappear. They can’t afford to cut the cord before the Chinese market and asian export targets are satisfied with Chinese build quality.

  • avatar
    Francois

    Honestly – the fact that the Chinese bought the company meant this was going to happen at some point.

    Speaking as someone that has done business with Chinese companies, we can expect a drop in whatever quality already exists. This is not a bash on the Chinese in general – I found the people (on a personal level) to be warm and open. They are not a culture of engineers, however. PC apologists are fond of saying that the Chinese build to a price point, and that if payed well they will build good products. I used to believe that myself.

    The fact is, they are not Japanese, German, or even Swedish – craftsmanship and build quality mean absolutley nothing to them, and I came away with the impression that they can’t even comprehend what those qualities mean. This is a cultural trait that will not be fixed. Culturally, they would much rather cut corners and save money at the expense of build quality, and become confused as to why everyonr says their products are crap. They genuinely cannot fathom what sets their products apart from the products that come out of Japan and Germany.

    I like Volvos, but they will not be the same in a couple years.

    • 0 avatar
      jeffzekas

      I have a Chinese scooter- 60 miles- starter broke- lights broke- no turn signals- motor rattling- yet, it is a “clone” of a Honda design. But, it was not built by Honda, by Japanese workers, to Honda QC- so it is an epic fail. I will never own another Chinese scooter. I would never buy a Chinese car.

      • 0 avatar
        CJinSD

        I’ve a friend that’s a brilliant engineer and a former BMW tech. He buys crate scooters. He fixes the issues before unleashing his wife on them so some O***a voter can steal a reliable form of transportation.

    • 0 avatar
      tekdemon

      What nonsense. China is probably the only country run by engineers, virtually all the country’s leaders are engineers and you can see from large infrastructure projects that China is perfectly capable of very good engineering feats. The problem is that many factories are run by clueless idiots who’ll ruin quality to save a nickel and have no concept of building up a reputation or brand. But that doesn’t apply to all factories and lots of Chinese firms have excellent quality control. Huawei, Lenovo, etc. Geely’s main weakness is that they have no real idea about modern car factories, most Geely vehicles still use a lot of manual assembly instead of robotic stuff but far as I can tell Geely quality is on the better end of Chinese cars.

  • avatar
    Volt 230

    Why not just change the name to Vorvo and quit pretending that there is anything remotely Swedish (European) about them?

  • avatar
    thornmark

    Volvo means “I roll” in Latin. Audi means “hark” or listen.

    Ford means “you won’t get close to advertised mpg” in any language.

  • avatar
    Sob93

    As long as the engineering is top-notch and quality parts and accessories are used it doesn’t matter that much who assembles the vehicle. There are no more national car companies they are all a mish-mash of international corporate bean counting a-holes.

  • avatar
    brid1970

    Geely has shown its mettle in the huge leaps it has made in quality over a short time. I think the team of Volvo-Geely shows great promise.

    • 0 avatar
      Tostik

      +1

    • 0 avatar
      jeffzekas

      Promise? With Volvo? Every Volvo owner I’ve ever met has spent thousands in maintenance and repairs on their “reliable” Swedish engineered car!

      • 0 avatar
        Tostik

        I own 3 Volvos. 2002 V70, 1998 V70XC, and a 2006 2.5T AWD XC90. They’ve all been fantastically reliable cars. Maybe a repair bill every other year. The XC90 is mine, the V70 is my daughter’s, and the 1998 V70XC is my wife’s. Every time I talk about getting my wife a new Volvo she gets mad–she loves her 1998 V70XC. Volvo for life!

  • avatar
    MoDo

    Should’ve sold the company to BMW, they wanted Volvo and were in the running.

  • avatar
    Oelmotor

    Bye bye Volvo, it was nice knowing you.

    BTW…I like how the employee on the right is wearing her helmet.

  • avatar
    PandaBear

    I don’t see it as doom and gloom like all you guys are. Geely bought Volvo for the tech and know how, not to knock down their Swedish plant and lay off all the workers to outsource there.

    Currently the Chinese still relies heavily on foreign help to keep their heavy industry (and to some point light industry) going, and they are not feeling comfortable because if you look at Malaysia, Thailand, and Indonesia you know being just a manufacturing site don’t translate into good domestic brand and design over time (Japanese make sure that none of the local partners learn anything important). Buying a good quality near bankrupt foreign firm is the only way to learn that quickly.

    I’d see them run Volvo the same way they run Lenovo: keeping the quality while building up a high quality Chinese brand, so they will not need to rely on foreigners 20 years from now. Your American Volvo will still be from Sweden, with some Chinese parts made with Volvo Swedish engineers supervision in China, just like how every electronics of American / Japanese brands are made in China these days.

    They may gradually reduce the head count in Sweden over time (retirement) and make it the flagship only factory with R&D engineering office.

    • 0 avatar
      Tostik

      I think BMW, VW/Audi, Mercedes, GM, Ford, etc., will have to build more car factories in China until all car manufacturing in the world is in China. They can’t let Volvo have a cost-of-manufacturing advantage with all their factories in China. LOL. Of course none of the above is going to happen.


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