One in three Volvos to be made in China

Unveiling two new versions of flagship S90 saloon, chief executive announces production of S90 will soon end in Europe and henceforth be exclusively at their factory in Daqing

Li Shufu, founder and chairman of Geely Holding Group and Hakan Samuelsson, President and CEO of Volvo attend Volvo's S90 launch (Reuters)

In a move that underlines the rise of China as an automotive global power, Hakan Samuelsson, President and CEO of Volvo Car Group has confirmed that a third of Volvo's target global production of 800,000 units annually will be sourced from one of three Chinese plants.

Since 2010 Volvo has been owned by Zheijiang Geely Holding Group, and the two partners have worked together on engineering and investing in a wider production baase for Volvo, traditionally linked to Sweden.

Unveiling two new versions of the flagship S90 saloon, Mr Samuelsson also announced that production of the S90 will soon end in Europe and henceforth be exclusively at their factory in Daqing in China. To further balance currency risk Volvo is building a new facility in the US, in South Carolina.

The next generation of the Volvo V40 will be made in Europe and at a new factory being constructed in Luqiao, south of Shanghai.

The new versions of the S90 very much reflect the tastes of China's elite, the growth of which is establishing China as the largest market for premium brands in the world. The S90 “Excellence” has its front passenger seat removed to make way for a range of luxury and hi tech fitments, reminiscent of first class air travel, as well as affording the rear occupant a better view. Chauffeur travel is more common and more prestigious in China than in Western markets.

More conventionally, the S90 “L” features a longer wheel base than European versions, giving extra space for the boss classes in the back. This approach is commonplace for European designs making the transition to the Chinese market: Audi and Peugeot are just two of the other marques who have adapted existing designs in this way.