Chinese carmaker and Volvo parent company Geely is set to launch a new brand set to fit in under Volvo as a maker of more affordable models allowing the Swedish brand to focus on its upmarket segments.

Volvo is understood to be working with Geely to develop a range of cars for the new brand, codenamed 'L', by creating new vehicle architecture that will first be used to underpin an SUV. This architecture is also expected to underpin a sedan at a later stage; sources have said both models will be based on the Compact Modular Architecture (CMA) platform developed by Geely and Volvo. The CMA architecture is also set to underpin future Volvo and Geely models with the Swedish automaker already having put the development of the XC40 small SUV on priority.

It is yet unconfirmed if the new brand is only China specific, though sources have suggested that it could possibly expand into other international markets. Geely in an official statement to sister publication, Autocar stated, "Geely has plans to unveil a new product range over the course of 2016; more information will be released in due course." Volvo however, declined to comment.

Earlier reports also indicated that the CMA platform had been developed to help Geely grow in other international markets and that that recent sluggish demand in its home market will not affect the brand’s success in the long run.

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