Employees walk under a car assembly line at Geely Automobile Corporation in Cixi, Zhejiang province

Chinese auto firm Geely plans SUV to target Western markets

Chinese carmaker Geely will start producing a small crossover utility vehicle developed with Volvo in a bid to break in to markets in the West.

The car is yet to be named, but will hit showrooms in China in early 2017, several European markets a year or so later and eventually the USA, two senior executives separately confirmed, one of whom recently left the Chinese group.

The new car will be based on a common platform called Compact Modular Architecture (CMA) and engine technology that Zhejiang Geely Holding Group has developed with Volvo Cars, the struggling Swedish automaker that Geely chairman Li Shufu bought from Ford nearly five years ago.

"With the CMA car, Li wants to tell the world we're ready for the big time. We're ready to break into Europe and the US," said one of the sources, who asked to remain anonymous as he is not authorized to speak to the media about Geely's plans with the CMA platform.

Geely, which also owns black cab maker London Taxi Company, is building a new assembly plant in eastern China, which will eventually have the capacity to produce 150,000 CMA-based vehicles a year for both Geely and Volvo.

The CMA-based crossover will pioneer the new common platform and Geely plans to unveil it at next year's Geneva or Beijing auto show, one of the sources said.

The "scalable" CMA platform can be stretched to accommodate bigger midsize cars and will allow Geely to revamp most of its product line-up and plan the bigger models it will need to attract buyers in the US.

"We have had discussions with Volvo to see whether we could build a factory in the US to assemble cars together," one of the executives told Reuters.

Volvo, meanwhile, plans to use the CMA platform to upgrade its small vehicles, producing them at the new China assembly plant and in Europe. Volvo did not immediately respond to a request for comment.

The crossover will initially be an alternative-fuel version for export to Europe as the firm believes targeting Europe with an alternative-fuel model will position it as a maker of affordable high-tech cars rather than just another cheap, no-frills Chinese brand, the executives said.

"It's an effort to burnish our brand before we bring out more mainstream gasoline-fuelled cars to Europe and eventually to the US," one of them said.

Initially, Geely plans to sell the new car in Spain, Portugal, Italy, Britain and Eastern Europe. "Those markets, Britain in particular, are open to foreign cars, while northern Europe, France and Germany are not,” said the soruce.

In China, Geely plans to sell a gasoline-engine version from early 2017, followed by a couple of alternative fuel variants, such as plug-in hybrids.

Geely and Volvo have already worked together on one car, the GC9 sedan that was recently launched in China. The two firms have set up a joint technical centre in the Swedish city of Gothenburg to develop common small-car platform and powertrain technologies and Geely has also beefed up its expertise by hiring Volvo engineers and designers.

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