First Chengdu-made Volvos exported to the US

Follow me to Chengdu:

I'm Rong Rong the panda and I live in the land of abundance, also known as Chengdu and its vicinity in Sichuan province. I have many skills that are the stuff of legend. So I have guests from across the world who come here to experience my pure awesomeness. Some are investors. I'll tell you, they love it here. A guy named Volvo has even made something that's exported to your homeland. I heard it's really cool. Get ready to feel the thunder. Hopefully my country’s President, Xi Jinping, can celebrate this move with the U.S. when he visits at the end of September.

--Panda Rong Rong

Volvo's new luxury sedan, the S60 Inscription, has been rolling off the assembly lines at its plant in Chengdu and was to debut in the US market in September.

Chinese company Zhejiang Geely Holding Group Co purchased Volvo, which is headquartered in Gothenburg, Sweden, from Ford Motor Co in 2010. The Volvo assembly plant in Chengdu, the first in China, was opened in 2013.

Volvo expected to export about 5,000 S60s to the US each year, while the factory in Chengdu, capital of Sichuan province, also makes a similar model for Chinese customers.

"The move to export Volvos is a big one symbolically for China," said David Zoia, editorial director at industry website WardsAuto. "If successful in the (US) market, it will prove that China can compete here. It would also demonstrate that American buyers are willing to purchase cars from China."

Workers on the Volvo assembly line in Chengdu. The S60 Inscription, Volvo's new luxury sedan being exported to the United States this month marks the first time China has exported a luxury car to the US.[Photo provided to China Daily]

Sean McAlinden, executive vice-president of research and chief economist at the Center for Automotive Research in Ann Arbor, Michigan, also saw made-in-China Volvos being sold in the US as a watershed moment for China's auto industry.

"Currently, China does not export world-class luxury cars, which require the highest levels of design and assembly quality," he said. "If the China-made S60 succeeds, it means other luxury vehicles from China can be accepted in the world market. Much respect will be gained. The US market is the most open and competitive in the world."

The initial Volvo shipment in May came just a few months before China National Heavy Duty Truck Group exported 200 trucks made at its Chengdu plant to Vietnam, marking its first step into the Southeast Asia market.

The presence of Volvo and other automakers like Volkswagen and Toyota in Chengdu has turned the auto industry into a robust growth point for the city's foreign trade. From January to July, Chengdu's automobile exports increased by 2.6 times year-on-year, hitting 280 million yuan ($43.6 million).

By early August, 268 of the world's top 500 enterprises listed by Fortune magazine had set up factories or regional headquarters in Chengdu, the third-highest number in China, after Shanghai and Beijing. The city's abundant labor resources, developed transport infrastructure, and efficient government have all helped attract global companies.

An aerial view of Chengdu, a modern city where the auto industry is expected to be another important growth point for the economy and trade.[Photo provided to China Daily]

Texas Instruments, the world's largest manufacturer of semiconductors, has had a branch in the city for four years and has made Chengdu an important strategic point in China.

On Nov 6, TI announced plans to build a 300-millimeter silicon wafer-processing plant in Chengdu to expand production capacity. The company previously chose the Chengdu Hi-Tech Industrial Development Zone as the site for its seventh assembly and testing operation, which covers an area of 33,260 square meters.

"As a regional economic growth pole and center of the electronic information industry in western China, Chengdu provides an important guarantee for Texas Instruments' development in China in the long run," said Larry Tan, president of TI in Asia. Last year, Intel announced it would invest $1.6 billion in its plants in Chengdu over the next 15 years to upgrade its preprocessing of wafers, and packaging and testing procedures, as well as to introduce its advanced testing technology to China.

The company said the investment would help it to go deeper into the market segments of computing and telecommunications, especially tablets, computers, smartphones, the Internet of Things, and wearable smart devices.

"In the past 10 years, we have grown with Chengdu and the supply chain," said Bian Chenggang, general manager of Intel's Chengdu operation. "We will continue to promote the development of the hi-tech industry and contribute to the development of the hi-tech ecological system."

Intel was the first global company to invest on a large scale in western China. The company invested $600 million in Chengdu between 2003 and 2009, establishing the world's largest chip assembly and testing factory and one of the company's three largest silicon wafer preprocessing factories.

Chengdu now manufactures more than 50 percent of the world's laptop microchips.

Since Intel moved to the city in 2003, a batch of major IT companies, including Foxconn and Dell, have also arrived. IBM also established a headquarters for its global smart city research and development center in Chengdu in July last year.

By the end of last year, there were more than 300 enterprises in Sichuan acting as supporting units in the supply chain for Intel, 20 enterprises around Foxconn, and more than 1,000 involved in the supply chains for Dell and Lenovo, according to the Southwestern University of Finance and Economics.

The city is now a regional hub in western China for integrated circuits, electro-optic displays, computers, network communications, electronic components, information security, the Internet of Things, and cloud computing.

Last year, exports of computers, integrated circuits and micro-electronic components accounted for nearly half of Chengdu's total exports.

Park Kyu-ho, executive vice-president of Korea Electronic Power Corp, the largest power group in South Korea, said after visiting Chengdu in May: "I have visited 17 Chinese cities, and have been to the high-tech zones in Tianjin and Shanghai. I found the electronic information industry in Chengdu is comparable to Shanghai."

Paul Welitzkin contributed to this story.