On September 26, 2013, Daqing Volvo Car Manufacturing Co., Ltd. (a joint venture company of Volvo Group in China) was officially established, which marks a new stage of rapid development for Volvo's local production and also a new chapter of Volvo's development plan in China and its global revival development strategies. The establishment of a new plant in Daqing also signified a new phase of Volvo's march into the luxury car market. Vice-governor of Heilongjiang Province Zhang Jianxing, Municipal Party Secretary of Daqing City Han Xuejian, Mayor of Daqing City Xia Lihua, Chairman of Geely Holding Group Li Shufu, and Senior Vice-President of Volvo Group and also head of Volvo's operations in China Lars Danielson attended the establishment ceremony.
In August of this year, Volvo's industrial layout for local production in China won approval from Chinese government. The layout consists of an assembly plant in Daqing, an engine plant in Zhangjiakou and a R&D center in Shanghai. After receiving green light from Chinese government authorities, plants in Daqing and Zhangjiakou will be operated in the form of two joint venture companies.
Given similar latitudes between Daqing and Gothenburg, Sweden, where Volvo is headquartered, both cities share similarities in climate, geography, living conditions, humanities, entrepreneurship and other aspects. Volvo is currently carrying out its transformation and revival plan worldwide while Daqing has never stopped exploring its own transformation as a resource-dependent city. The common needs bind Volvo and Daqing together.
Located in the hinterland of Northeast China which connects to the six countries of Northeast Asia either by land or sea, Daqing is blessed with distinctive geographical advantages. The business and trade exchanges as well as the demand of luxury goods within the Northeast Asia economic circle serve as a propeller for Volvo's development in China. At present, Daqing is at a crucial juncture of economic and driving force transformation and ecological construction improvement. During the critical period like this, Daqing's forward-looking and strategic vision, pragmatic development policies and a potential market are also magnets for Volvo.
Daqing Volvo Car Manufacturing Co., Ltd. is located at the High-tech Zone of Daqing City. The plant, which is slated for operations during the fourth quarter of this year, consists of a press workshop, a wielding workshop, a painting workshop, an assembly workshop and other auxiliary facilities. The production capacity of Daqing plant's first phase project stands at 80,000 units with further expansion to be decided by market demand. When the plant is fully completed, Daqing will turn itself into an auto industrial cluster which could generate a sales revenue over 100 billion yuan and provide about 6,000 new jobs. As a result, the luxury car industrial pattern of the three provinces in the Northeast China will be remodeled.
Chairman of Geely Holding Group, Li Shufu noted, "The establishment of Daqing Volvo Manufacturing Company marks a milestone in Volvo's business development in China and the world at large. It is also an important measure made by Geely to answer the nation's call to revitalize the old industrial base in Northeast China and to promote transformation of Daqing as a resource-dependent city. We hope that Volvo's strategic development in China can integrate with Daqing's city transformation and bring this city international resources, ideas and advanced technologies and that the completion and perfection of Volvo's industrial layout in China could contribute to promote a sustainable development of Volvo's global business.
Mayor of Daqing City Xia Lihua expressed that Volvo's joint venture company in Daqing is a fine example of actively seeking opportunities to develop alternative industries, quickly promote a successful transformation of resource-dependent cites and achieve sustainable development. It will give Daqing a boost to grow into an international city with high-tech, high value-added and modern industries. Also it will reshape the luxury car industry of the three provinces in Northeast China into the one with three rivals and lay a solid foundation for Volvo's rapid development in China.
Senior VP of Volvo Group and head of Volvo's operations in China Lars Danielson said, "Daqing plays an important role in Volvo's growth strategies in China. The manufacturing base in Daqing always upholds Volvo Cars Manufacturing System (VCMS) and quality standards in planning, construction and production. With precise standardization production and craftsmanship on a par with that of other luxury brands, Volvo is committed to providing its consumers with "safe, healthy, environmental friendly and elegant" Volvo cars and luxurious life experience of Northern Europe."
CEO of Volvo Group China and Chairman of Daqing Volvo Car Manufacturing Company, Tong Zhiyuan said, "Volvo's plant in Daqing will follow Volvo's uniform standards worldwide in R&D, purchase, production and quality. Meanwhile, Volvo will benefit from Daqing's unique geographic advantages and competent production team and in turn contribute its share to the construction of a world-class manufacturing base and transformation and upgrading of China's auto industry.
The establishment of Volvo's joint venture company in Daqing is another landmark event in Geely's development after the acquisition of Volvo. Volvo Group has so far erected a complete operation system and fully functional organization structure in China. The launch of local production of Volvo is also accompanied by a rising sales volume in China. As of August, 2013, Volvo has sold a total of 37,661 cars, a year-on-year increase of 40.2 percent, highest among all luxury brands. China has become Volvo's second home and the second largest market.