Zhejiang Geely Holding Group is planning to build a Volvo factory in China after buying the Swedish car unit of Ford Motor, media sources have reported, citing sources familiar with the deal.

Ford and Geely on December 23rd agreed on most terms for selling the U.S. automaker's Volvo Car Corp to China's largest private automaker in the second quarter next year. They plan to sign a definitive agreement by March 31st, with a sale to be completed by June 30th. The deal was reportedly in the region of US$ 1.8 billion to US$ 2 billion.

Geely may build a Volvo factory in Beijing and is also considering two other Chinese cities for the facility, the sources said. The plant will be capable of producing 300,000 vehicles a year and will help more than double Volvo's annual global sales to one million cars within five years, Geely said last month.

"Volvo will retain its leadership in safety and environmental technologies, and will be uniquely positioned as a world-leading premium brand to exploit opportunities in the fast-growing China market," Geely said in a statement.

Geely and Beijing Auto (that is buying GM's Saab unit) are among Chinese carmakers buying assets overseas to develop own models as economic growth spurs demand in the nation, now the world's largest auto market.