Gasgoo.com (Shanghai October 3) - Volvo's largest and most expensive model is about to be unveiled, Shanghai Securities News reported CEO of parent company Geely Automobile Li Shufu as saying earlier this week. With those words, Geely has set its sights on competing with BMW and Mercedes to strengthen its hold on the luxury segment.

Developing facilities to produce vehicles in the country is one of Volvo's strongest tools to recover and compete with other manufacturers for Chinese consumers. Volvo has invested $11 million in expanding its operations over the next five years. According to Mr. Li, those funds will be used to release new luxury models.

At this September's Frankfurt Motor Show, Volvo showed off the You concept (pictured above), which it introduced as a leading, competitive luxury sedan. The You will replace the S80 to become the brand's most expensive model and directly compete with the BMW 5 Series and Mercedes E-Class.

At the floor of this year's 9th Annual China Automotive Industry Forum held at the China Europe International Business School, Senior Vice President and Board Chairman for Volvo Cars' China department Shen Hui said that the manufacturer hopes to use the Chinese market to springboard its global recovery. "In the upcoming five years, Volvo Cars' sales in China will reach 200,000 vehicles," Mr. Shen said. China has already become the manufacturer's third largest market, with its sales in the first three quarters of this year amounting to 33,000 vehicles.

Volvo's new Shanghai R&D center will be a driving force behind the manufacturer's global strategy. The 306 acre site began operation earlier this week, and there are construction plans for a new technology building, design center, engine testing room and wind tunnel in the works. The new C30 pure electric (pictured below) will reportedly be developed at the site.