Zhejiang Geely Holdings Group will soon announce a plan to develop a new Chinese brand with Volvo Car Corp through a 50-50 joint venture.
Although Geely acquired Volvo in 2010, Volvo is still considered a foreign car company, the group's spokesman, Yang Xueliang, said yesterday.
'A Sino-foreign car joint venture cannot just produce foreign car brands in China - it must also conduct research and development to produce indigenous brands and new-energy cars. So this is what we are doing now and hopefully we will make an announcement in about two months,' Yang said.
The first sedan bearing the Geely and Volvo brand names will be launched early next year and will be positioned as a mid-range passenger car. Geely will also launch seven models of sport utility vehicle (SUV) this year, hoping they will boost sales on the mainland, where SUV demand remains strong despite flagging sales of other car categories.
According to China Automotive Monthly, Geely, China's third-largest local manufacturer and seventh-largest if foreign carmakers are included, sold 473,626 cars last year, excluding sales of Volvo-branded vehicles. That represented a year-on-year increase of 6 per cent but was about 10 per cent below the firm's target. The group's chairman, Li Shufu, is expected to reveal more on the joint-venture plan when its Hong Kong-listed arm, Geely Automobile Holdings, announces the company's year-end results in late March.
Meanwhile, another Chinese carmaker, Great Wall Motor, opened its first European factory in the Bulgarian town of Lovech on Tuesday.
The Euro100 million (HK$1.03 billion) plant - controlled by a joint venture in which Great Wall holds a minority stake - plans to manufacture 50,000 Great Wall models - Hover SUVs, Steed pick-ups and Voleex city cars - when it begins mass production in 2013. Great Wall Motor, which listed in Shanghai in September, exported 83,000 vehicles last year to 120 countries and regions including Europe. The euro zone debt crisis is expected to dent demand this year.