Volvo to build range-topping S90 sedan in China

Thu, 13 Nov 2014

Volvo is furthering its deep ties in China by announcing a major expansion to its factory in Daqing that will equip the site to build its future S90 sedan. The automaker is promising to make the plant, "one of the most advanced car making facilities in China," according to its press release. Unfortunately, the company isn't specifying the amount being invested or how long the work will take.

Because the northeastern Chinese city of Daqing owns about 37 percent of the automaker, the location for the significant expansion isn't entirely surprising, especially since Geely owns a majority stake in the Swedish brand. The existing factory there employs about 700 people to build the original XC90 for the local market, but the upgrades will allow the plant to handle Volvo's Scalable Product Architecture modular platform.

To be fair, Volvo doesn't specifically call out the S80-replacing S90 by name in its announcement. However, it promises the first vehicle built in Daqing after the expansion will be a new premium sedan, and the upgrades will allow the plant to make "most innovative vehicles in its product range," and the range-topping sedan is widely expected to adopt the S90 moniker.

"We are fully committed to the growth of our business in China, our second home market," Håkan Samuelsson, Volvo Cars' President and Chief Executive, in its announcement. With over 80,000 estimated sales in China this year, the market is now the automaker's single largest worldwide.

The S90 is part of Volvo's realignment of its naming scheme to its 40, 60 and 90 series, with plans for a sedan, wagon and crossover for each of them. Styling is still a mystery, but the V90 is rumored to take cues from the handsome Concept Estate. Hopefully, some of that fantastic design rubs off on the four-door, too. Scroll down to read the company's full announcement for the expansion.

Volvo Cars expands Daqing operation

Daqing to become one of China's most advanced car plants
Expansion will spur economic development in the Daqing region
Commitment will further boost Volvo's sales in China

Volvo Cars today underlined its long term commitment to China by significantly expanding its manufacturing facility in Daqing, China. The company will use its Daqing plant to make the most innovative vehicles in its product range, which are based on its Scalable Product Architecture (SPA), a flexible, scalable product architecture that covers most of Volvo's future car models. This move will make Daqing one of the most advanced car making facilities in China.

Volvo Cars has an existing manufacturing facility in Daqing which was founded in September 2013. Its first product, the XC Classic, is the latest version of Volvo's world famous XC90 SUV, and was launched in China in September 2014.

The existing Daqing plant has around 700 employees and an initial capacity of 80,000 vehicles. The first SPA Volvo to be made in Daqing will be an all-new premium Sedan.

The Volvo Cars manufacturing plant in Daqing, China

Volvo Cars' decision to significantly expand production in Daqing highlights its growing commitment in China. The Swedish company is majority owned by Zhejiang Geely Holding, a Chinese company, but also enjoys a close and developing relationship with the Daqing city government, which owns 37 per cent of Volvo Cars.

Volvo Cars and the city of Daqing are working together to help spur economic growth and development in the city and surrounding region, driven by Volvo Cars' growing presence in the fast growing Chinese car market.

Volvo Cars expects sales in China to surpass 80,000 this calendar year, making China Volvo's largest global market. It has a long-term goal of selling 200,000 cars a year in the country.

"Daqing will become an integral part of our global industrial footprint," said Håkan Samuelsson, Volvo Cars' President and Chief Executive. "We are pleased to announce that we are going to introduce SPA and a new sedan here. We are fully committed to the growth of our business in China, our second home market."

Cars made in the Daqing plant will be of global standards. The Daqing plant will fully adhere to Volvo's global Volvo Car Manufacturing System (VCMS), and utilize global technology, global sourcing and provide global quality.

"Using precise, standardized production methods and world-class premium automotive technology, Daqing will provide consumers with safe, healthy, environmentally-friendly and tasteful Volvo cars with a flavour of Scandinavian luxury," said Mr Samuelsson.

The City of Daqing

Volvo Cars is working closely with the city of Daqing to help accelerate its economic development, in line with the national policy of "Reinvigorating the Northeast." Daqing is seeking to reduce its traditional dependence upon natural resources and instead emerge as a sophisticated and world class centre for advanced manufacturing.

"We are delighted to be working with Volvo Cars to help Daqing evolve into a high-tech, high value-added, international city with a modern industrial base. It will also lay a solid foundation for the premium car industry in Northeast China and for Volvo's rapid development in China," said Han Xuejian, Party Secretary of Daqing.

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Volvo Car Group in 2013

For the 2013 financial year, Volvo Car Group recorded an operating profit of 1,919 MSEK (66 MSEK in 2012). Revenue over the period amounted to 122,245 MSEK (124,547 MSEK), while net income amounted to 960 MSEK (-542 MSEK). Global retail sales for the year amounted to 427,840 (421,951) cars, an increase of 1.4 per cent compared to 2012. The operating profit was the result of cost control and strong sales and was further tangible proof of Volvo Car Group's progress in implementing its transformation plan. For the full year 2014, the company expects to stay in black figures and predicts to record a global sales increase of close to 10 per cent.

About Volvo Car Group

Volvo has been in operation since 1927. Today, Volvo Cars is one of the most well-known and respected car brands in the world with sales of 427,000 in 2013 in about 100 countries. Volvo Cars has been under the ownership of the Zhejiang Geely Holding (Geely Holding) of China since 2010. It formed part of the Swedish Volvo Group until 1999, when the company was bought by Ford Motor Company of the US. In 2010, Volvo Cars was acquired by Geely Holding.

As of December 2013, Volvo Cars had over 23,000 employees worldwide. Volvo Cars head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars head office for China is located in Shanghai. The company's main car production plants are located in Gothenburg (Sweden), Ghent (Belgium) and Chengdu (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China) and body components in Olofström (Sweden).

By Chris Bruce