Geely is setting up a new aerospace company

China's Zhejiang Geely Holding Group plans to set up a commercial aerospace company to develop its satellite and communications technologies in the southern city of Guangzhou, the local government said on Tuesday.

Geely, which owns Volvo Cars and 9.7% of Daimler AG, will also work with other rocket companies in Guangzhou, the government said.

The company was not immediately available for comment after usual business hours.

Geely is building low-orbit satellites to meet demand for high-speed connectivity capabilities that can deliver fast software updates. From around 2025, Geely's cars will have more functions to connect to the satellites.