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Volvo Cars to make China global manufacturing and export hub

SHANGHAI – Volvo Cars unveiled a new manufacturing strategy for China in which production capacity will be increased and China will be developed into a global manufacturing and export hub servicing growing demand for its new range of cars in the U.S., Europe and Asia Pacific.

The company made the announcement at an event in Shanghai on November 2 unveiling the upcoming China-built S90L sedan ahead of the model’s first public appearance at Auto Guangzhou 2016 later this month.

Volvo Cars will make its top-of-the-range S90-series cars, based on its Scalable Product Architecture (SPA) at its plant in Daqing, Heilongjiang Province. Both the S90L and a China-only version called S90 Excellence will be made there. The production of the S90 standard wheelbase version will also be moved from Europe to China in the future. The S90L goes into production in November and the S90 Excellence follows next year.

The Swedish premium carmaker owned by Geely also announced that existing and future 60-series medium-sized SPA-based cars will be built at its plant in Chengdu, Sichuan Province, while its planned 40 series smaller cars, based on its Compact Modular Architecture (CMA), will be made at a plant that is currently being built in Luqiao, Zhejiang Province, about 350 km south of Shanghai. The Luqiao plant, which is owned by Geely but operated by Volvo Cars, will also make CMA-based cars for LYNK & CO, the new car brand launched in October by Geely, highlighting the growing industrial synergies being developed by the automotive group.

“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 Håkan Samuelsson, president and CEO of Volvo Car Group.

The new S90L will be the most premium car ever made in China. Both versions will be built in Volvo Cars’ production facility in Daqing and exported globally, demonstrating the high levels of quality control that underpin Volvo’s global manufacturing strategy.

“China will play an increasingly important part in our global manufacturing ambitions. Our factories here will deliver world-class products for export across the globe in coming years, contributing to our objective of selling up to 800,000 cars a year by 2020,” said Samuelsson.

Volvo Cars has paved the way in developing China’s exports of locally made cars to global markets. It was the first Western car maker to export a premium China-made car to the U.S. in 2015 with the S60 Inscription produced at the Chengdu plant.

Volvo Cars also operates an engine production facility in Zhangjiakou, Hebei Province and a R&D center in Shanghai. It currently has 115 local suppliers and 209 dealers. In the first 10 months of this year, it sold 71,683 cars in China, up 12.5 percent and accounting for about one-sixth of its global sales.

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