Geely and Volvo recently agreed upon a technology transfer deal, permitting Geely, the Chinese carmaker to utilize the advanced technologies authorized by Volvo cars in its automobile quality enhancement and high-end brand development.

Even though Geely purchased Volvo in March 2010, co-operation is going to take the shape of a commercial deal among two distinct companies, with Geely having to pay Volvo for technology and the latter utilizing these payments to invest in research and development to maintain its leadership in higher quality cars.

The offer provides Geely access to Volvo’s hybrid technology as well as small car platform design, while Volvo receives Geely’s purchasing power and enables it to share elements.

Volvo ranked as the world 4th most significant luxury car brand in 2011 with worldwide sales reaching 449,300 cars, nearly equaling to the company’s all-time record of 458,300 in 2007. Sales of Volvo cars in China increased over 54% to achieve 47,140 last year. The figure continues to trail industry leaders, with BMW selling 217,100 cars along with Mercedes Benz selling 204,400.

Within the agreement, Zhejiang Geely is going to make use of its full access to technology authorized by the Swedish carmaker to build up a brand new premium brand for the Chinese marketplace, said Yang Xueliang, a spokesperson for Geely’s parent company.