"We're in the middle of a big transition – a big transformation. We are redefining the brand." Jacoby said.
Volvo's reputation for no-frills safe and reliable cars will be updated to meet Chinese consumers demands for more luxury.
Volvo confirmed that the new assembly plant in Chengdu will be open in early 2013 with an initial capacity for 125,000 cars a year. The company is also investigating the possibility of a plant in Daqing, in the northeast. The plant in Chengdu is 1,600 kilometres west of Shanghai, where Volvo Cars China has its headquarters.
Stefan Jacoby resassured workers at Volvo's main plant in Gothenburg that the expansion plans in China would not deflect the importance of their work.
"Our production in China will not have any impact on decisions affecting capacity utilization of our plants in Sweden and Belgium."
Li Shifu, chairman of China's Geely Holding Group said;
"We continue to uphold our principle that Geely is Geely and Volvo is Volvo. A more globalized, more focused luxury brand will turn our vision of a growing and profitable Volvo Car Corporation into reality. The company will continue to contribute to the development of the global automotive industry by introducing world-first innovations that make an outstanding brand win in the marketplace."
Global retail sales of Volvo during 2010 reached 373,525, an increase of 11.2 per cent compared to 2009.