Volvo to take over Geely car plant in Luqiao
Geely has given its subsidiary Volvo Cars control of the car plant in Luqiao, China, where the Polestar 2 and Volvo XC40 Recharge electric models, among others, are produced. In the process, the Luqiao production plant will be renamed Taizhou.
According to a statement, the parent company and the subsidiary have agreed to integrate the plant into the Volvo Cars assets. The background to this is an earlier agreement between the two sides that Volvo Cars will fully acquire from Geely all plants where its cars are produced within the next two years. In Luqiao, this is the case with the Volvo XC40 and the all-electric XC40 Recharge and Polestar 2 models. The models are all based on the Compact Modular Architecture (CMA), which was jointly developed by Volvo Cars and Geely Holding.
Volvo Cars’ position in China is to be strengthened by the new ownership structure, the manufacturer says. In addition, the transfer of the factories creates a clear allocation within both the Volvo Car Group and Geely Holding. For the employees in the factories, nothing is to change in the ongoing operations.
However, in the case of Luqiao, all 2,600 employees at the plant will transfer from Geely Holding to Volvo Cars. The plant, which had been owned by Geely Holding since it opened in 2017, had been “operationally supported” by Volvo Cars until then. The new ownership will now be accompanied by a renaming of Luqiao to Taizhou. The background to this is Volvo Cars’ naming convention, whereby plants in China take the name of the home city rather than the home district.
“The transfer of the Taizhou plant is a sound and logical move for both parties, as the plant is now fully dedicated to produce Volvo Car Group’s cars,” said Javier Varela, head of engineering and operations. “It is symbolic that the plant that produced the first unit of our first fully electric car, the Polestar 2, will continue to help us grow in our aim to become a global leader in the premium electric car segment.”
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