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Volvo increasing XC40 production, expanding compact-car family

Strong early sales of the XC40 are prompting Volvo to ramp up production in Belgium and China.

The new Volvo XC40 has already proven so popular that the automaker is ramping up production of the compact luxury SUV. Volvo will add capacity to build even more XC40s at its plant in Ghent, Belgium, and also will start building the model at the Luqiao, China, plant in the first half of 2019.

"The XC40's success has surpassed even our highest expectations," said Håkan Samuelsson, Volvo Cars president and CEO, in a statement.

2019 Volvo XC40

Volvo has already received 80,000 orders for the new XC40.

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To date, the company has received over 80,000 orders for the XC40 globally. As of May 1, Volvo had recorded 2,483 XC40 sales in the US, but that number is likely to increase now that the Care By Volvo subscription program is ramping up.

According to Automotive News, Volvo freed up production capacity at the Ghent plant by shifting assembly of the S60 sedan and V60 wagon away from that facility. The next S60 sedan will be built in the US, while the new V60 has been moved to Torslanda, Sweden (with some leftover capacity in Ghent). The Ghent plant reportedly has an annual capacity of 270,000 to 290,000 vehicles, but currently produces about 230,000.

Volvo also used today's announcement to confirm its plans to build more compact vehicles on the Compact Modular Architecture (CMA) used for the XC40. The company didn't offer many details on the new models, saying only that they would replace today's not-sold-in-America V40 wagon. The XC40-based Lynk & Co 01 is also built on CMA and will be assembled at the Ghent factory, as well as in China.

The biggest hints about the new CMA models are that Volvo wants the range to include electric cars, and that the new compact vehicles will be sold "globally in all major regions." The automaker plans for half its sales to be electric cars by 2025, so it's not surprising new EVs are on the agenda. One of them is expected to be the Polestar 2, a Tesla Model 3-rivaling vehicle likely inspired by the look of the Volvo 40.2 concept.