Daqing has already launched its Volvo project, according to Li Shufu, chairman of Geely and Volvo, and an insider added that a piece of land in the Economic Development Zone in the city has been reserved for Volvo's new factory.

Li stated that Daqing offers advantages to become a production base for Volvo because of its location in northeast China, which enjoys favorable policies from the government.

"The local government of Daqing attaches great importance to this project. The production capacity of the factory is expected to reach 300,000 units, which includes the first phase of 100,000 units before 2015, and 200,000 units after with a total investment of 5 billion yuan," Li said.

Volvo plans to set up plants in Chengdu and Shanghai as well. Shanghai has good hardware and software facilities, as well as strong support from the government, and Chengdu has a factory ready after being redesigned by Volvo.

However, Li added that the construction of the three plants still awaits final approval from Volvo's management team and board of directors.

China's business press carried the story above on Tuesday. China.org.cn has not checked the stories and does not vouch for their accuracy.