IPOH: Zhejiang Geely Holding Group Co plans to use Malaysia as a hub to assemble Volvo cars for the Asean market, said International Trade and Industry Minister II Datuk Seri Ong Ka Chuan.
Ong added that while Volvo cars are already being sold in Malaysia, Geely does not have a sophisticated plant in the country to produce them.
"They plan to do it in a big way – Asean has a population of approximately 620 million and it's a big market," he told reporters after opening the Gopeng MCA annual general meeting here on Sunday.
Ong added that it is a good strategy to assemble the cars in Malaysia and sell them to the Asean market.
He said Geely - which owns the Volvo brand - would be setting up a plant to produce the cars in Tanjung Malim, where Proton currently has a plant.
"They have to set up the factory within five years. It will be done in stages. They are now in the process of relocating its operations. They will start building the plant next year," he said.
Geely currently has 16 manufacturing plants, seven design studios, and five research and development centres across the globe.
In May, DRB-Hicom Bhd announced it was selling a 49.9% stake in loss-making Proton to the China-based automaker.
As part of the deal, Geely would also buy the entire stake in Lotus from Proton.
Proton has a ready capacity in its plant in Tanjung Malim, which produces 150,000 cars annually and designed to have a maximum capacity of one million units per year.
DRB-Hicom and Geely are expected to finalise the deal in July.