Volvo on Monday announced it will produce some cars for Lynk & Co. at its plant in Ghent, Belgium, starting from 2019.

The plant is where Volvo produces compact cars like the V40 and XC40, along with the V60 small wagon.

The announcement is the latest is a series of collaborative efforts between the two brands, following Volvo's acquisition of a 30 per cent stake in Lynk & Co. last year. The two brands also share the CMA modular platform for compact cars.

Lynk & Co. is the new youth-focused brand of Chinese auto giant Zhejiang Geely Holding, which also owns the Volvo, Polestar and Lotus brands as well as sizeable stakes in Daimler and Proton.

Lynk & Co. 03 concept

Lynk & Co. 03 concept

Lynk & Co.'s first model, the 01 compact SUV, was launched on the Chinese market in 2017. More markets are to follow including Europe and eventually the United States. Cars made at the Belgian plant will be sold in Europe initially.

“We see a big potential for this new brand entering the European market and we are happy to give Lynk & Co. the support of Volvo’s technological and industrial expertise,” Volvo CEO Håkan Samuelsson said in a statement.

The move is also a boon for Volvo and its suppliers which will benefit from the increased economies of sale.

Lynk & Co.'s 01 is a twin under the skin with Volvo's XC40. The brand's upcoming 03 compact sedan and 04 compact hatch are expected to be closely related with a new S40 sedan and a redesigned V40 hatch from Volvo.