"We are soon going to make a decision on the first plant," Stefan Jacoby told the financial newspaper Dagens Industri.

"Production will begin in two years. We are waiting for approval from the authorities."

Geely, which acquired the Swedish car maker from US giant Ford in August, said in September it planned to increase Volvo sales to 300,000 cars a year in China alone.

Geely head Li Shufu, who is also Volvo chairman, said he wanted three new Volvo plants in China to produce that volume.

Volvo said an agreement on the company's "strategic direction" in China had been reached on December 9, with details on its application to be worked out at a meeting of the executive board.

Jacoby said the goal is to quickly expand annual sales in China to 100,000 vehicles from the current level of 30,000.

Volvo already builds its S40 and S80 models in China through a partnership between former owner Ford and Chinese group Chang'an.

Volvo employed 19,650 people in 2009, down from nearly 28,000 five years earlier, and Jacoby said the company planned to re-hire 500 workers in Sweden next year thanks to a rebound in sales.

Sales had fallen from a peak of 460,000 vehicles in 2007 to around 330,000 in 2009 before rising to 380,000 this year.

Geely, which paid 1.5 billion dollars (1.1 billion euros) for Volvo, hopes to double production over the next 10 years, mainly for the Chinese market.

earlier related report
21 dead, 25 injured in China road accidents
Beijing (AFP) Dec 27, 2010 - At least 21 people were killed -- including 14 schoolchildren -- and 25 injured in two car accidents in China on Monday, one of which involved over 100 vehicles, state press reported.

The 14 children died when the three-wheeled vehicle in which they were travelling plunged off a road in central Hunan province early Monday, Xinhua news agency said.

Xinhua earlier said nine children were killed and one was missing in the accident, in Hengnan county.

Later it reported that the missing child was found dead, while four other children died after being taken to hospital. Six others were injured in the wreck.

In the second accident, seven people were killed and 15 injured during a pile-up involving over 100 vehicles on a fog-shrouded highway in southwest Guizhou province, Xinhua said in a separate report.

Visibility was less than 50 metres (yards) on the road when the pile-up occurred. Following the accident, traffic on the highway backed up for 20 kilometres (12 miles), the report said.

China's roads are among the most dangerous in the world, with traffic laws widely flouted.

Almost 70,000 people died in road accidents in 2009, or around 190 fatalities a day, according to police statistics.

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