Chinese-owned Swedish Volvo Car expects to be selling 200,000 cars a year in China by 2018, a senior executive said, two years ahead of its latest target and as a new assembly plant gears up for full production later this year. The company plans to more than double its annual global sales to 800,000 cars by 2020, from 373,000 sold in 2010. Volvo originally said demand in China would account for nearly half the additional volume it plans to generate around the world, but momentum fizzled last year as Volvo was forced to implement discipline at its independent dealer-operators. While Volvo has failed to boost its China sales as much as it had hoped since 2011, the executive – who spoke on condition he wasn’t named as the sales projection is an internal target – said the renewed confidence was due to expectations for local car production and to changes in how it manages its network of retail showrooms. Those changes, he said, have resulted in “lots of good returns, and sales are now growing as planned.” A new Volvo plant in Chengdu is “more or less completed”, said Volvo Spokesman Per-Ake Froberg, and is producing a limited number of cars to test the facility’s manufacturing processes and the quality of the cars it plans to make there. Full production should begin in the fourth quarter. The plant will be able to produce 125,000 cars a year. A second assembly plant is being built in the northeastern city of Daqing, with production not expected to start until the end of next year, Froberg said. With the Chengdu plant running, Volvo could hit its 200,000 cars a year goal in five years. Volvo’s ‘s global sales fell 6.4% in January-April to 132,519 cars, but in China Volvo increased its sales by 27.6% to 18,490 cars. Neither Volvo nor Geely has said which models they plan to produce in Chengdu and Daqing, but company insiders have said Chengdu is likely to make a long-wheelbase version of the S60 sedan that Volvo has developed especially for Chinese drivers. The Daqing plant is expected to produce sport utility vehicles (SUVs) such as the XC90, which one insider said would soon undergo a full re-design. The Daqing plant will likely make the current XC90 model, with the re-designed model shipped to China from Sweden, the South China Morning Post reports.

Volvo Car will begin production this month at its first factory in China, allowing it to avoid the mainland’s 25% import tariffs. “If they fail in China, I don’t really see where they can gain volume significantly,” said Lin Huaibin, Shanghai-based Analyst at IHS Automotive. “If they can do China right, they will gain strong momentum.” Volvo posted a loss last year as global sales fell 6.1% to 421,951 units, with the biggest decline in Sweden. In China, sales dropped 11%, while deliveries at competitors Audi and BMW climbed 40% and 30%, respectively. Volvo’s share of China’s luxury vehicle market fell to 3.4% last year from 5.3% in 2009, the year before the Geely takeover, according to estimates at IHS Automotive. One reason for Volvo’s underperformance is price. For example, its XC60 sport utility vehicle starts from CNY389,900, 8.8% higher than a mainland-produced Audi Q5, according to price comparison website Autohome.com.cn. Volvo’s reputation for safety, Scandinavian design and environmental care and performance will help it attract the growing number of Chinese consumers seeking to embrace a “more understated luxury”, a Spokesman said.