A joint venture project between the Geely Group and the Volvo Investment Co has gotten the nod from the National Development and Reform Commission, for manufacturing engines in the city of Zhangjiakou, Hebei province, with an annual capacity of 325,000 units.

The Chinese market has been an important part of Volvo's development and Zhangjiakou, which is not very far from Beijing, is a good place for Volvo's top models and this production site is in the industrial district of Nanshan. Representatives of the local government have said that the 26.6-hectare project will contribute a lot to the city's development.

Another government official, Guo Jingang, says he thinks the Volvo project has great industrial development potential and that it could be an industrial leader in the city in the future, so, the government places a lot of importance on it and will invest more.

“The successful launch of this Volvo project will be an opportunity for Zhangjiakou to make some structural adjustments on its own equipment manufacturing business,” Guo added.

The Nanshan industrial cluster got government approval on March 21, 2012 and the Volvo project is at the core. This cluster will become an international vehicle city with engine manufacturing, gear boxes, and auto parts, along with a research and logistics center.

Liu Xuefeng, a deputy director of Zhangjiakou's industrial affairs office, said that the automobile industry is large and can provide jobs and that the Volvo project will attract more equipment manufacturers to Nanshan to form a complete auto industry line-up.

The Volvo engine factory also means training opportunities for the Chinese, for example, Wang Jinlong, who was sent to Sweden for several months of training. Talent development is another benefit the project is expected to bring to Zhangjiakou.