Volvo begins production of XC40 SUV in China

Robust demand in China for the XC40 sees Volvo Cars begin local production.

By Autocar Professional Bureau

12 Apr 2019

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Car manufacturing underway at the Luqiao plant in China.

An aerial shot of the Luqiao manufacturing facility in China. The Luqiao plant is owned by Zhejiang Geely Holdings but operated by Volvo Cars

The XC40 is seeing a surge in demand in China. In India too, it has helped drive up volumes for Volvo Cars.

Volvo Cars has commenced production of its award-winning XC40 in Luqiao, China this week to meet ever-growing demand for the company’s first small premium SUV.

The XC40 was launched in late 2017 to global acclaim and was the first ever Volvo to win the European Car of the Year award in March 2018. Until now Volvo Cars’ Ghent plant in Belgium has been the sole production site for the XC40, which has sold over 100,000 units globally already.

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. “Demand for the XC40 has exceeded our most optimistic expectations,” said Håkan Samuelsson, president and chief executive for 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 this week it will build the fully electric Polestar 2 fastback in Luqiao as of next year.

This means soon, the Luqiao plant will 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), co-developed with Geely. This provides 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 focused 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).

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

Also read: Volvo India sells 2,687 units in FY2019, up 25%