Volvo's plan to set up a manufacturing base in Jiading district, Shanghai was approved by the National Development and Reform Commission, the Oriental Morning Post reported today, citing a source familiar with this matter.

According to a report posted on the government's website of Jiading district, Shanghai, the plant will cover 1500 mu and will produce mainly its compact vehicle C30 and luxury vehicle V70.

The plant, which will have an annual capacity of 300,000 vehicles, is expected to begin production in 2012, the report said.