Volvo to invest $11B in 5 years around globe

BEIJING -- Volvo Cars said Friday it will invest as much as $11 billion worldwide over the next five years in an ambitious expansion following its acquisition by a Chinese automaker and will try to rapidly grow in China.

The company said it plans to open a production base in southwestern China and is looking at a possible second site in the northeast.

Volvo CEO Stefan Jacoby said the investment also will pay for a new vehicle platform and powertrain for China.

Volvo was acquired in August from Ford by Geely Holding Groupfor $1.5 billion. Geely's strategy calls for making Volvo a "completely independent automaker" and giving Jacoby's team independence in decision-making, said Geely Chairman Li Shufu.

Volvo's China plans call for boosting sales to about 200,000 vehicles by 2015, up from 39,000 last year. Worldwide, Volvo hopes to double sales to 800,000 by 2020.

"China plays a significant role in this growth plan," he said. "We have also significant growth plans in the U.S. and Europe."

Chinese buyers see Volvo as a premium brand on a par with Mercedes-Benz or BMW, in contrast to its less-luxurious image elsewhere, said Boni Sa, an auto industry analyst for CSM Worldwide. "If Volvo can build the right car for Chinese customers, they will see significant growth in China," Sa said.

source :  http://www.freep.com/article/20110226/BUSINESS01/102260325/1207/business01/Volvo-invest-11B-5-years-around-globe