Volvo to build XC40 SUV in China as demand grows

The XC40 is based on a platform Volvo developed with Geely designed to share the costs of developing and manufacturing a competitive vehicle.

The platform, called Compact Modular Architecture, is shared by vehicles produced by sister brands Lynk & Co and Polestar, with Geely also planning to base a new Coupe SUV on it. Automakers are going through one of their most uncertain periods, hit by trade wars, rising costs for developing electric cars and an industry downturn that has dented even the most profitable brands.

The Luqiao plant, owned by Geely and operated by Volvo, currently builds the 01 SUV sold by car subscription-focused brand Lynk & Co, Polestar, Volvo and Geely's electric performance brand, said separately on Friday that starting next year it would also use Luqiao to produce Polestar 2, its first fully electric sedan that is intended to rival Tesla's mass market Model 3.

Geely has forecast flat sales in 2019 due to uncertainty about domestic demand, while Volvo has said it expects margins to remain under pressure.

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