The center will be located in the Shanghai International Automobile City, which is about 25 kilometers west of downtown Shanghai.

"We have reached a deal and the r&d center will be built in our automobile city," said Xu Ming, the City's vice general manager. 

Xu made the remarks while speaking at an automobile electronics forum held in the City in late June. The new r&d center will be called Geely-Volvo Research and Development Center, according to him.

Covering an area of 90 square kilometers, the automobile city is mainly an industrial park. It is home to Shanghai Volkswagen Automotive Co. and Shanghai Automotive Industry Corp. It also shelters the China headquarters of dozens of international parts suppliers such as Fiat Powertrain Technologies and Schaeffler Group.

Further details about Volvo's r&d center was not available.

In March, Geely signed an agreement with Ford Motor Co. in March to buy Volvo Car Corp. for $1.8 billion (12.2 billion yuan). The deal is expected to be completed in the third quarter. 

After signing the Volvo deal, Geely's president Li Shufu said last March that Volvo's biggest handicap is its small scale. He said Volvo can start making profits after sales reach 370,000 units a year. 

Last year, Volvo's worldwide sales totaled 335,000 vehicles, including 22,664 units in China.

According to press reports, Geely is scouting possible sites in China for a Volvo assembly plant.