Volvo Cars has agreed to buy out its parent, Geely Holding, from their joint ventures in China in a deal that will see the Stockholm-based company take full ownership of car manufacturing plants and sales operations in China, Volvo Cars said in a statement.

The acquisition of an additional 50 per cent of the shares in Daqing Volvo Car Manufacturing Co., Ltd and Shanghai Volvo Car Research and Development Co., Ltd will further strengthen Volvo Cars’ position in China, which is its largest market.

“With this agreement, Volvo Cars will become the first major non-Chinese automaker with full control over its Chinese operations,” said Håkan Samuelsson, chief executive of Volvo Cars.

“Geely Holding Group and Volvo Cars are continuously evaluating the best way to collaborate and structure operations within the wider Group. These two transactions will create a clearer ownership structure within both Volvo Cars and Geely Holding,” said Geely Holding chief executive, Daniel Donghui Li.

Volvo Cars has grown significantly faster than the average market in China in recent years. In 2020, it sold 166,617 cars in China, an increase of 7.5% versus 2019. In the first half of 2021, sales increased 44.9% compared with the same period in 2020, and by 40.1% compared with the same period in 2019. Following the ownership change, Volvo Cars will have full ownership of its manufacturing plants in Chengdu and Daqing, its national sales company in China and its R&D facility in Shanghai.

The change will take place in two steps, starting in 2022 when the joint venture requirement for auto manufacturing in China will be lifted and is expected to be formally completed in 2023. The transactions are currently pending regulatory approvals.