Metropolis extends global auto industry reach

Chengdu is drawing a growing number of large investment projects with its solid industrial foundation.

Work began this month on a car production plant based on Volvo’s scalable product architecture, a fullsize unibody automobile platform, in the city’s Longquanyi district.

The project, a joint undertaking of the Chengdu city government and Zhejiang Geely Holding Group — which owns Sweden’s Volvo Car Group — will cost 11.2 billion yuan (1.33 billion pounds) and is designed to be able to produce 200,000 vehicles a year.

The two parties have also signed another two car production project agreements.

One project will use the latest modular architecture platform BMA developed by Geely and Volvo to produce vehicles and will also deal with advanced hybrid and plug-in hybrid power systems. It cost 10.5 billion yuan and is expected to be able to produce 300,000 vehicles a year.

The other project will produce high-performance purely electric vehicles under the Volvo brand, as well as locally-branded, purely electric vehicles based on European technology. It will be able to produce 100,000 cars a year.

Geely started its investment in Chengdu by setting up a manufacturing base in 2007. The company purchased Volvo in 2010 and later built the first Volvo manufacturing plant on the Chinese mainland in Chengdu.

Volvo’s new luxury sedan, the S60 Inscription, has been manufactured in the Chengdu plant and exported to the United States since September 2015.

Li Donghui, executive vice-president of Geely, said he expects the Chengdu base to have annual output reach 100 billion yuan after all the projects are put into operation.

“We will build the Chengdu base into one of our most important strategic centers for new energy vehicles to serve the markets along the Belt and Road,” he said. The Belt and Road refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road.

Nearby, the Chengdu plant of Dongfeng Peugeot Citroen Automobile, a joint venture between French carmaker PSA Peugeot Citroen and Chinese automaker Dongfeng Motor Corp, started operations in September.

The plant i s DPCA’s four th manufacturing plant in China. It mainly produces vehicles for the Peugeot and Citroen brands, as well as Dongfeng’s Fengshen brand, with a focus on high-end SUVs and multipurpose vehicles.

With a total investment of 12.3 billion yuan, the plant has a planned annual production capacity of 360,000 automobiles.

“The operation of the Chengdu plant marks a solid step for the development of DPCA and Dongfeng Motor in western China,” said Zhu Yanfeng, chairman of Dongfeng Motor.

Chengdu is the gateway for the company to implement its westward growth strategy, he said.

Chengdu is a major auto manufacturing base in western China. The city’s Longquanyi district has attracted automakers including FAWVolkswagen, DPCA, Geely and Volvo, as well as many car component suppliers.

The Longquanyi district produced more than 1.1 million cars last year, and the number is expected to reach 1.25 million this year.

New Volvo cars roll off the company's production line in Chengdu.[Photo provided to China Daily]