Less than 100 days after leaving Mercedes-Benz’s Beijing operation to lead Volvo Cars Greater China, Duan Jianjun is overseeing a project Volvo long resisted: a full-size flagship sedan.
36Kr has learned from several sources that Volvo is preparing to launch a high-end D-segment sedan, codenamed “561.” People familiar with the matter said the model is being positioned against the Maextro S800. It would sit above the S90 as the flagship sedan in Volvo’s lineup.
Duan joined Volvo in May and took responsibility for its product, R&D, supply chain, and sales operations in China. During his previous 13 years at Mercedes-Benz’s Beijing business, he helped the Mercedes-Benz S-class and Mercedes-Maybach establish a foothold in China’s D-segment sedan market.
Project 561 will be the first major test of his leadership at Volvo.
According to 36Kr, the vehicle is planned as a China-only model and will follow the joint development approach used for models such as the XC70. Volvo China will define the product, set safety standards, and oversee vehicle homologation. Geely’s China R&D team will be responsible for the battery, electric motor, and power electronics systems, as well as vehicle engineering and supply chain management.
At Volvo’s second-quarter earnings presentation on July 17, its global CEO said the company would unveil two electrified models in early fall. It is unclear whether project 561 will be among them.
If launched, the model would be Volvo’s first D-segment executive sedan in its nearly 100-year history. It would also mark Geely’s first entry into the segment since the group was founded about four decades ago.
Sources said Geely’s senior management has directed resources from across the group to support the project.
“The company has already suspended or delayed similar projects at Galaxy, Lynk & Co, and Zeekr to ensure that Volvo’s 561 project receives the best possible resources,” one source said.
In China’s luxury automotive market above RMB 500,000, (USD 73,762.6) D-segment sedans often serve as technology flagships. Their sales volumes are typically lower than those of SUVs, but automakers use them to showcase new technology and reinforce their premium positioning.
For the past three decades, the segment has been dominated by the Mercedes-Benz S-class, BMW 7 series, and Audi A8. Chinese automakers had little presence until recently. Several brands tested the market, but none attracted enough attention or sales to challenge the three German marques.
In 2025, Huawei and JAC Motors jointly launched Maextro. Its first model, the S800, is a D-segment executive sedan priced from RMB 708,000 (USD 104,447.9) to RMB 1.018 million (USD 150,180.7).
Large-scale deliveries began in August 2025, with more than 1,000 units delivered in the first month. Deliveries reached 4,376 units in December, exceeding the combined monthly sales of the Mercedes-Benz S-class, BMW 7 series, Audi A8 L, and Porsche Panamera, according to figures cited by 36Kr.
The S800’s use of electrification and smart vehicle technology has encouraged other automakers to reconsider the D-segment sedan market.
Volvo pares dealer network as it pursues a flagship sedan
SUVs have formed the backbone of Volvo’s business in China for more than a decade.
The midsize XC60 entered local production in 2013. Its sales grew quickly, making it Volvo’s bestselling model in China. It has routinely accounted for about 40% of the brand’s local sales and helped make China Volvo’s largest single market.
Volvo therefore began its transition to electrification with SUVs. Starting in 2020, it introduced the all-electric XC40, EX30, and EX90, followed by the XC70 plug-in hybrid model in 2025.
That five-year push coincided with a rapid shift in China’s automotive market. New energy vehicles, a category that includes battery electric and plug-in hybrid models, increased their share of sales from 5% to 53.9%.
Even as electrified vehicles account for roughly half of new vehicle sales, the gasoline-powered XC60 remains Volvo’s bestselling model in China, followed by the XC90. Together, the two internal combustion engine SUVs account for about half of the brand’s sales.
Volvo sold 170,000 vehicles in China in 2023, reaching what was then a high point for the brand. Since then, China’s market for gasoline-powered vehicles has continued to contract.
Sales of internal combustion engine passenger vehicles fell 26% year-on-year in the first half of 2026. In June, sales declined 38.9%, while their share of the overall market fell to 45%.
Volvo China, which remains heavily dependent on gasoline-powered models, sold 53,000 vehicles in the first half of 2026, down 27% from a year earlier. As competition in the luxury market intensifies, the company is under pressure to change course.
According to 36Kr, Volvo began consolidating its dealer network this year.
An unnamed dealer cited by the publication said a dealership could sell about 30 vehicles a month in 2025, while incurring monthly operating costs of up to RMB 600,000 (USD 88,515.2). Some outlets in outlying areas recorded annual net losses of nearly RMB 2 million (USD 295,050.5).
Several dealers also told 36Kr that the XC60, which cost them more than RMB 300,000, (USD 44,257.6) was repeatedly discounted to as little as RMB 220,000 (USD 32,455.6) in 2025. Subsidies and rebates failed to close the gap, leaving dealers with a loss on each vehicle sold and prompting lower-volume outlets to cut staff.
Consolidating the dealer network may reduce losses, but Volvo will also need new products to revive sales. Project 561 is a central part of that effort.
Volvo China deepens its reliance on Geely
At Volvo’s annual shareholders’ meeting in March, Eric Li said siloed operations would eventually disappear. Volvo’s transition to new energy vehicles in China increasingly reflects that view.
Volvo began its electrification push with CMA, a compact modular architecture jointly developed by Geely and Volvo. It underpinned Volvo’s first all-electric model, the XC40, as well as Geely group vehicles including the Lynk & Co 01 and Geely Xingyue L, also known as the Monjaro.
In 2022, Volvo introduced SPA2, its flagship battery electric platform, with the large EX90 electric SUV as its first model. An electric evolution of the original SPA architecture, SPA2 kept core technologies, including electric powertrains and smart driving systems, under the control of Volvo’s R&D center in Sweden.
Volvo began directly adopting Geely platforms in 2023. It developed the compact EX30 SUV and the luxury EM90 MPV on Geely’s Sustainable Experience Architecture.
The launch of the XC70 in 2025 brought Volvo’s hybrid-focused SMA platform to market. Volvo continued to define the platform, but its powertrain and chassis modules drew extensively on established Geely technologies.
A person close to Volvo told 36Kr that the company’s Swedish R&D center has recently been developing vehicles on new platforms, but those programs no longer include localized models for China.
Taken together, the changes point to a clearer division of responsibilities. Volvo’s Swedish headquarters will focus primarily on vehicles for Europe and North America, while its China operation will use Geely’s technology ecosystem to develop China-specific models.
Volvo China has also made several organizational changes to support the strategy.
In mid-2025, Volvo told the media that it had eliminated 283 jobs in China. At the end of the year, it began repatriating foreign employees, including many Swedish expatriates.
A closer working arrangement with Geely has also taken shape inside the company.
Some members of Volvo China’s procurement and R&D teams have been required to travel between Shanghai and Hangzhou each week to coordinate with their Geely counterparts.
A person familiar with the situation told 36Kr that some team leaders had said internally that remaining Volvo employees would need to align their working methods and pace with Geely.
Volvo China underwent a major leadership change in May, when Duan formally succeeded Xiaolin Yuan as head of Volvo Cars Greater China.
Duan now oversees the entire regional operation, including product development, R&D, the supply chain, marketing, and sales.
After taking office, he also joined Volvo’s core global decision-making group and began reporting to the Volvo Cars China board. The changes suggest that Volvo China could gain more authority over product development.
For the first time, the China team may have a broader mandate covering model planning, technology adoption, development schedules, and supplier selection.
A person familiar with the matter told 36Kr that Duan’s main challenge is to use Geely’s technological capabilities to restore Volvo’s sales while reinforcing its premium positioning. Project 561 will be a defining test for both Duan and Volvo.
The model is expected to receive Geely’s most advanced driver assistance and smart cockpit technologies and take a flagship position within the wider group, according to sources.
It is also intended to reinforce Volvo’s standing as a luxury brand, support its declining sales base, and provide a technology template for subsequent models.
In 2013, then-Volvo global CEO Hakan Samuelsson said the company had no plans to launch a model in the same class as the Mercedes-Benz S-class, BMW 7 series, or Audi A8, and might never do so.
Founded in 1927, Volvo is approaching its centenary. After decades of avoiding the D-segment sedan market, the Swedish brand is now preparing to enter it with Geely’s support.
Geely has committed substantial resources to the project, while Volvo China has gained greater autonomy. The proposed sedan will test whether that closer relationship can translate into a competitive flagship model.
KrASIA features translated and adapted content that was originally published by 36Kr. This article was written by Xu Caiyu for 36Kr.
Note: RMB figures are converted to USD at rates of RMB 6.78 = USD 1 based on estimates as of July 29, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.