Exclusive - Chinese automaker Geely gears up for push into Europe, U.S.

By Norihiko Shirouzu

BEIJING (Reuters) - Chinese automaker Geely is set to start producing a small crossover utility vehicle late next year - the first car to be built using a common platform jointly developed with Volvo.

The car - yet to be named - will hit showrooms in China in early 2017, several European markets a year or so later, and eventually the United States, said two senior executives, 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 it bought from Ford Motor Co (F.N) nearly five years ago.

Geely's cooperation with Volvo, a storied brand best known for its focus on safety, is seen as a possible model for Chinese companies trying to digest and manage acquired consumer brands. When Geely chairman Li Shufu pounced on Volvo, many doubted that a relative newcomer could turn around the loss-making, 87-year-old company while protecting its more upmarket brand.

"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 U.S.," said one of the knowledgeable individuals, who didn't want to be named as he is not authorized to speak to the media about Geely's plans with the CMA platform.

NEW PLANT

Zhejiang 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.

For export to Europe, the new plant's CMA-based small crossover SUV will initially be an alternative-fuel version. 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.

In targeting Europe with an alternative-fuel model, Geely wants to be seen as a maker of affordable high-tech cars rather than just another cheap, no-frills Chinese brand, the executives said, adding Geely plans a limited number of flagship showrooms in Europe.

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