Geely gearing up to launch new car brand in Europe

Chinese car maker Geely is reportedly preparing to launch a new car brand in Europe, which will sit below its premium marque Volvo.

According to news website Reuters, the new brand will focus on affordable models, allowing subsidiary company Volvo to concentrate on the luxury end of the market.

It’s not yet confirmed if the new brand will be sold outside of China, but sources have suggested it will reach Europe as early as this year.

Autocar UK contacted Geely for an official comment, and the car maker responded with: "Geely has plans to unveil a new product range over the course of 2016, more information will be released in due course." Volvo declined to comment.

Volvo is understood to be working with Geely to develop a range of cars for the new brand, codenamed ’L’, by creating new vehicle architecture that will first be used to underpin an SUV.

This architecture is also expected to underpin a saloon at a later stage; sources have said both models will be based on the Compact Modular Architecture (CMA) platform developed by Geely and Volvo. The platform itself is based on a Ford design that was acquired by Volvo back in 2010.

The architecture is also expected to underpin future Geely and Volvo models. Volvo has already confirmed that the CMA will be used on a family of smaller models for Volvo, with its XC40 crossover a priority.

Earlier reports also suggested the new CMA architecture has been created as part of Geely’s push for growth in America and Europe, suggesting that recent sluggish Chinese demand for new cars will not be significant to the brand's success.

Doubts have been cast over the success of a new venture in China, a market that has fallen into decline in recent months, although Geely has demonstrated its strength by defying market trends and growing its sales by 22% last year, while Volvo’s earnings have tripled.