Volvo plant to make Lynk & CO cars for Europe

Lynk & CO, the Chinese-backed startup that is partly owned by Volvo Cars, will produce its 01 crossover at Volvo’s factory in Ghent, Belgium, starting in 2019, Lynk & CO and Volvo said, ending months of speculation.

The 01 shares its Compact Modular Architecture (CMA) platform with the Volvo XC40, and the two cars will be made on the same production line. The 01 was launched in China late last year, and Lynk & CO says it will go on sale in Europe in 2019.

Lynk & CO boss Alain Visser said that 01s made in Ghent would be sold in Europe and have plug-in hybrid powertrains to start.

Cars for the Asian market are built at Luqiao, China, where they also share a line with the XC40.

Sales in the United States are expected to start in 2019, and Lynk & CO has said it is studying the possibility of starting production there.

A Volvo spokeswoman said there are no current plans for joint production with Lynk & CO at the Swedish automaker's new U.S. plant in Ridgeville, South Carolina. Volvo is focused on starting the production of the S60 sedan in Ridgeville later this year and the introduction of the next-generation XC90 in 2021, the spokeswoman added.

Visser has said that Lynk & CO aims to sell 500,000 cars annually by 2021, with half in China and 125,000 each in Europe and the United States. Volvo declined to provide a production forecast for the 01 but did say that it foresees long-term sustainable volumes for Lynk & CO models in Ghent.

The Ghent factory, which opened in 1965, is one of two Volvo manufacturing plants in Europe along with Torslanda, Sweden. The Ghent plant has about 5,000 workers and in addition to the XC40, it builds the V40 and V40 Cross Country hatchbacks, and the S60 sedan. The factory will soon start producing the new-generation V60 station wagon.

Adding the Lynk 01 will lower costs and “have a positive effect” on employment at the Ghent plant, Volvo said in a statement, and will generate economies of scale for the shared CMA platform.

“We see a big potential for this new brand entering the European market and we are happy to give Lynk & CO the support of Volvo’s technological and industrial expertise,” Volvo CEO Hakan Samuelsson said in the statement.

Volvo holds a 30 percent stake in Lynk & CO, and 50 percent is held by Geely Automobile Holding. The remainder is held by Zhejiang Geely Holding. Zhejiang Geely bought Volvo from Ford Motor in 2010.

Geely's chairman and founder, the Chinese billionaire Li Shufu, has ambitions of making the company into a global player. Last year he bought a controlling stake in the Malaysian automaker Proton, including 51 percent of the the British sports car brand Lotus. This year Li announced that he had acquired 9 percent of Daimler for a total of 7 billion euros, becoming the German automaker’s top shareholder.

Lynk & CO became a separate brand in 2016 targeting younger customers and promising an innovative retail strategy that includes online orders, a subscription model, and technology that facilitates car-sharing. In addition to the 01, future models will include the 03, a midsize sedan, and the 02, expected to be a coupe-styled crossover.

The 01 became available for pre-order in November in China. The company said it sold 6,000 vehicles in a three-day online sales campaign. The 01 went on sale officially at 150 brand outlets in China at the end of November.