Geely may start building Volvo plant
Updated: 2011-01-12 06:56
(HK Edition)
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Volvo hood ornaments are seen on the production line at its plant in Sweden. Expanding on the mainland is key to Volvo's goal of doubling sales to 800,000 cars in 10 years. Linus Hook / Bloomberg |
Company chairman points to Chengdu as a possible location
Zhejiang Geely Holding Group Co, the owner of Volvo Cars, may begin building a plant in China this year that will make the Swedish brand's cars.
"We have yet to decide on the location for the new plant, with Chengdu and other locations under study," Geely President Yang Jian said in an interview Tuesday. There is an opportunity for construction to begin this year, he said.
Geely, China's largest private auto maker, bought Volvo Cars from Ford Motor Co in August last year for about $1.5 billion. Expanding on the mainland is key to Volvo's goal of doubling sales to 800,000 cars in 10 years, Chief Executive Officer Stefan Jacoby said earlier.
The car maker exceeded its sales target in 2010 and seeks to double its consolidated profit by 2015 after the integration of Volvo.
Yang also told a business forum in Taiwan Tuesday that the company aimed to grow its consolidated sales by 150 percent to 2 million cars and is targeting profit of 200 billion yuan ($30 billion) by 2015.
Geely recorded sales growth in 2010 of 27 percent from a year earlier to 415,000 units, exceeding its target of 400,000. Consolidated sales, including Volvo, were 800,000 units and consolidated net profit was over 100 billion yuan.
The company is adding more expensive models to lure customers from rivals including General Motors Co and Toyota Motor Corp. The company said on January 6 that it aims to increase sales and production by at least 18 percent this year.
The automaker plans to add six new models this year, Vice President Liu Jinliang said Tuesday in Taipei. The average price of Geely's models will exceed 50,000 yuan ($7,548) this year, compared with 47,000 yuan in 2010, he said.
Yang said the company has been in talks with electronics giant Foxconn Group, the parent company of Hon Hai and Foxconn International, about developing green cars together. He did not provide any details about the likely cooperation.
Geely has also visited UMC, the world's second largest contract chipmaker, to talk about cooperation opportunities on so-called "intelligent" cars.
"We do not see sales of green cars jumping in the coming five years, but it is a trend and we are planning ahead," Yang told Reuters on the sidelines of the event.
He also said Geely had no plan to raise its stake in Manganese Bronze, which builds London's black cabs. Geely now owns 20 percent of the UK company.
China's vehicle sales jumped 32 percent in 2010, helping the nation remain the world's largest auto market for a second consecutive year. China surpassed the United States in 2009.
Chinese carmakers will face "pretty big difficulties" this year after the government scrapped stimulus measures that boosted deliveries last year, Dong Yang, vice chairman of the China Association of Automobile Manufacturers, said Monday.
Shares in Geely Automobile Holdings Ltd, the group's listed unit, fell 1.1 percent to HK$3.68 in Hong Kong trading Tuesday. The stock fell 20 percent in 2010.
Bloomberg - Reuters
(HK Edition 01/12/2011 page3)