Reports suggest that Volvo has announced a tie-up with its Chinese parent Zhejiang Geely Holding Group to build compact cars at a joint assembly plant in China for both domestic and international markets.
Sources add that the plant is presently operated by Volvo and will soon ramp up production in this quarter for the small car that’s underpinned by the Compact Modular Architecture (CMA) platform. This platform was jointly developed by both companies in Sweden.
Volvo is trying to create "synergies and economies of scale, by sharing development-intensive components: engines, transmissions, suspension parts, brakes, and manufacturing facilities. The effort won't dilute or jeopardize the identities of the two car brands," Volvo's global chief executive Hakan Samuelsson said.
Both Volvo and Geely have posted profits that have gone up considerably over the last year, and the duo are extremely positive about the small car venture. Though the group’s expertise will play a vital role, it looks like only time will tell how things will unfold.
