Volvo's China strategy is to produce more cars to meet the growing global demand. (Photo : Getty Images)
Volvo will be launching a new strategy in China and will start producing vehicles to get a stake in the country's car manufacturing sector.
Volvo's China production is aimed to increase the number of units to meet the demand in the U.S., Europe, and Asia-Pacific, as well as the increasing purchasing power for Volvo cars in China. In particular, the company intends to produce more of its S90 series, according to a press statement.
The S90 sedan was previously manufactured in Europe.
"With three plants--and the designation of one car line for each plant--Volvo creates an efficient production structure ensuring future capacity for growth," said Hakan Samuelsson, president, and chief executive.
The production of Volvo cars in China will include existing and future 60-series medium-sized SPA-based cars. These vehicles will be built at Volvo's China plant in Chengdu, Sichuan Province.
The S40 series is a smaller car and built based on Compact Modular Architecture (CMA). These cars will be made at a plant that is currently being built in Luqiao.
The Luqiao plant is owned by Zhejiang Geely but operated by Volvo.
According to Volvo S90 vehicle line director Kent Falck, Volvo had difficulty meeting demands in Europe. The automaker admitted that they couldn't fulfill orders for the S90 and the V90 station wagon.
There was a strong demand for its award-winning XC90 crossover that created production challenges for the other sedans.
Volvo's production in China involved an $11 billion investment with Zhejiang Geely Holding. The company also was bought from Ford Motor in 2010.
The Swedish manufacturer intends to produce one-third of the 800,000 units in China. The sales target is envisioned to be attained by 2020.
