While highlighting new-energy vehicle technology, Danielson said the capacity of traditional engines to improve fuel economy should not be ignored.

In that vein, Volvo showcased its Drive-E powertrains in Shanghai in February. The new engines are 50 kg lighter than their predecessors and can cut fuel consumption by 13 to 35 percent.

The Drive-E engines have been equipped on some models sold in China and Danielson said the engines would soon be produced in the country.

In addition, Volvo has been running a pilot electric vehicle program in cooperation with the International Automobile City in Shanghai.

China has become Volvo's largest and fastest growing market in the world. In the first nine months of this year, it sold 58,910 vehicles in China, a nearly 36 percent surge from the previous year.

Vehicles gearing up with a mind of their own	Volvo's XC90 drives the company into a new era