Volvo to begin production of XC40 at the multi-brand Luqiao plant in China

Apr 15, 2019   OEM

Volvo Cars is starting production of its XC40 in Luqiao, China to meet ever-growing demand for the company’s first compact premium SUV. The XC40 was launched in late 2017 to global acclaim.

Until now, Volvo Cars’ Ghent plant in Belgium has been the sole production site for the XC40, of which more than 100,000 units have already been sold globally. XC40s for the Chinese market are built at a manufacturing plant in Luqiao, south of Shanghai, which is owned by Geely and operated by Volvo Cars. Doing so brings XC40 production closer to the Chinese market and follows earlier production increases to meet XC40 customer orders.

 

“Demand for the XC40 has exceeded our most optimistic expectations,” said Håkan Samuelsson, President and Chief Executive of Volvo Cars. “Building the XC40 in Luqiao creates extra capacity, adds flexibility to our global manufacturing network and is a clear proofpoint of our strategy to ‘build where you sell’.”

 

The Luqiao plant already builds the 01 SUV sold by Lynk & Co, Volvo’s sister brand which it co-owns with Geely. Separately, Polestar, the electric performance brand co-owned by Volvo Cars and Geely, announced that it will build the fully electric Polestar 2 fastback in Luqiao as of next year.

 

This means that the Luqiao plant will soon build three models of three different brands within the wider Volvo Car Group on a single production line. The Volvo XC40, Lynk & Co 01 and Polestar 2 are all based on the Compact Modular Architecture (CMA) platform, co-developed with Geely.

 

As such, the Luqiao plant is an example of the collaboration between Volvo Cars and Geely, providing the necessary economies of scale to compete in today’s automotive industry.

 

Adding the Luqiao plant to its global manufacturing capacity further increases flexibility within Volvo Car Group’s global manufacturing footprint. The Luqiao and Ghent plants are now focussed on building cars based on CMA, while the manufacturing sites in Torslanda (Sweden), Chengdu and Daqing (both China) and Ridgeville, South Carolina (USA) build larger cars based on the Scalable Product Architecture (SPA) platform.

 

Lynk & Co was launched as a new brand by Geely Holding, the owner of Volvo Cars, in 2016. Volvo Cars owns a 30% stake in Lynk & Co. It also owns 50% of Polestar, while Geely owns the other half.

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