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by David Zalstein

Chinese car maker Geely will start selling vehicles co-developed with Volvo from 2015, according to latest reports.

Bloomberg reports Zhejiang Geely Holding Group Co. Ltd, which purchased Volvo from Ford for US$1.8 billion in 2010, is to begin selling cars jointly developed with the Swedish brand in its home market in two years.

According to the report, Geely CEO Gui Sheng Yue said the manufacturer has moved into the research and development stage of the partnership.

“I believe we can see the new product in the year after next,” Gui said.

Volvo test vehicle

Though the joint development with Volvo is aimed at boosting the Chinese marque’s image and help it achieve its goal of becoming the country’s largest auto exporter, the impact of the relationship on Volvo could be mixed.

In 2010, the Hangzhou-based company’s vice president for international operations Freeman Shen said Geely wanted to be careful not to damage the Volvo brand as a result of the takeover.

“We don’t want the image of a luxury car made in a third world country,” Shen said.

“We want the image of a European luxury car, albeit owned by a Chinese owner.”

In a clear sign of its future expectations for the Chinese market, Geely said in a statement, “competitive pressure on domestic brands in the China market should increase considerably in the coming years as most major international brands are strengthening their presence.”

It also says it’s preparing to introduce a series of ‘new-energy’ vehicles over the next year to cater for an expected increase in demand.

The developmental partnership between Geely and Volvo is a progression of a memorandum signed between the two in March last year, which opened the door to developing vehicles with “full access” to technology. It also led to Volvo announcing in February that it would establish a joint R&D centre in Gothenburg, Sweden.

Global Geely sales have increased 19 per cent in the first six months of 2013, to 263,544 units, with the company targeting a full-year figure of 560,000.




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