The Ministry of Industry and Information Technology has approved a passenger car project for an automaker owned by Zhejiang Geely Holding Group.

The total investment for the project, which will produce Volvo passenger cars, is 4 billion yuan ($630 million) and it is expected to start operations in 2013.

Through technology transfer and brand licensing based on the acquisition of Volvo Car Corp by Zhejiang Geely Holding Group, the program will establish assembly lines and related supporting facilities in Chengdu, Sichuan province, with an annual production of 50,000 Volvo passenger cars.

After construction of the Volvo Chengdu plant, the ministry will conduct on-spot examinations, after which the vehicles produced under the program will be allowed to enter the market, according to the Sichuan Provincial Economic and Information Commission.

Volvo had a market share of 0.3 percent in 2011 in China, and it aims to achieve a 20 percent market share by the end of 2016. It's estimated that it will have annual sales of more than 22 billion yuan once the Chengdu project is completed.

The project's approval brings golden opportunities to auto parts companies in the province, said the Sichuan Provincial Economic and Information Commission.

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