Reuters news agency reported on Friday that a source close to the company has revealed new and improved manufacturing plans in China.
Geely earlier stated its desire to work with local authorities and build production facilities which are tailor-made for the Chinese market.
Volvo began small-scale production in China in 2006 and today a number of Volvo models are being manufactured through Ford’s cooperation with Geely competitor Changan Automobile.
The cars include the S 40 model and a variant of the S 80 – which both sell at a substantially reduced price in China by avoiding high customs charges.
According to Reuters, Geely will acquire existing machinery from Changan. In the future it intends to collaborate with Chinese companies to build a new Volvo factory in Chongqing, in the south west of the country, where Changan’s own production plant is based.
Local production has led to steadily increasing sales for Volvo in China, but figures still remain relatively small.
Last year, around 15,000 cars were sold in the country compared with 12,600 cars in 2008.
Despite ongoing discussions to expand production to China, Geely has previously stated that Volvo’s head office and factory in Gothenburg will not be closed.