SHANGHAI (Bloomberg) -- Geely Automobile Holdings Ltd., whose Chinese parent bought Volvo Cars in 2010, will start selling vehicles jointly developed with the Swedish company in 2015 as it competes with foreign brands at home.
"We have entered into actual research and development stage and I believe we can see the new product in the year after next," Geely CEO Gui Sheng Yue told reporters at a briefing in Hong Kong, without elaborating on the new vehicle.
The joint development with Volvo, which built a reputation around safety and reliability, may help burnish Geely’s image as the Chinese carmaker seeks to become the country’s largest auto exporter. The Swedish nameplate has begun test runs at its first factory in China as it targets to double sales to 800,000 vehicles by the end of the decade.
"The economic environment in most of our major markets is expected to become more difficult in the second half of 2013, meaning that our operating environment should remain challenging in the remainder of the year," the Hong Kong-based company said in a statement. "Competitive pressure on domestic brands in the China market should increase considerably in the coming years as most major international brands are strengthening their presence."
Zhejiang Geely Holding Group Co., which bought Volvo from Ford Motor Co. for $1.8 billion in the biggest overseas purchase by a Chinese automaker, signed a memorandum with the Swedish company in March last year to “leverage its full access” to technology to develop vehicles. Volvo in February said it will establish a joint r&d center in Gothenburg, Sweden, with Geely.
Geely reported first-half net income rose 37 percent to 1.4 billion yuan ($228 million), beating analysts’ estimates. Vehicle sales increased 19 percent to 263,544 units in the first six months, the company said, and maintained its full-year target at 560,000 vehicles.
The automaker is also preparing to introduce a series of new-energy vehicles in the coming year to cater to an expected increase in demand, it said in a statement.