Geely, Volvo to start production of new vehicle

Geely will start selling these new vehicles in 2015 as it competes with foreign brands at home. The new range is expected to also become available on local shores once exports take off.

Geely CEO Gui Sheng Yue said the private automaker has entered the actual research and development stage. "I believe we can see the new product in the year after next," he said at a press conference in Hong Kong last week.

Sheng Yue added that the car was currently under development and is scheduled to be launched in 2015. He did not go into specifics, but the companies have already announced the car will ride on a new modular architecture that will underpin C-segment vehicles from both automakers.

The new Volvo/Geely developed model will be smaller than Volvo's Scalable Platform Architecture (SPA) and is expected to deliver "considerable cost savings in terms of development, testing and sourcing."

Brand integrity

Geely chairman Li Shufu has previously been quoted as saying the sharing of knowledge and technology had to be without jeopardising brand integrity and individual product development. "We believe a stand-alone, yet joint R&D Centre with a focused approach is the best way to achieve this."

The Geely joint development with Volvo, which built a reputation around safety and reliability, may help burnish the Chinese automaker's image as it seeks to become the country's largest vehicle exporter. The Swedish nameplate has begun test runs at its first factory in China as it targets to double sales to 800,000 vehicles by the end of the decade.

Geely reported first-half net income rose 37% to 1,4 billion Yuan (R2,28 billion), beating analysts' estimates. Vehicle sales increased 19 percent to 263,544 units in the first six months, the company said, and maintained its full-year target at 560,000 vehicles.

The private Chinese manufacturer is also preparing to introduce a series of new-energy vehicles in the coming year to cater to an expected increase in demand, it said in a statement.