Zhejiang Geely Holding Group, parent company of Volvo Car Corp and Geely Automobile Holding Ltd, is developing a new model at its new research and development center in Sweden.

The smaller car, developed jointly by engineers from Geely and Volvo, is designed to give the Swedish luxury brand, which Geely acquired in 2010, a foothold in the entry-level auto-buying segment, according to Wall Street Journal reports.

Although the new model is only at the initial development phase, which is due to last several years, the company said it is certain to meet Western markets' safety and quality standards.