China’s Geely Automobile Holdings, the new owner of Swedish car maker Volvo, will start selling vehicles on China’s largest retail website Taobao later this month.

The online store will initially offer the Geely Gleagle Panda compact car, and then gradually be expanded, Taobao said in a statement. Sales will begin on December 22.

China has the world’s largest online population, with at least 420 million internet users.

It also took over the title of the world’s top auto market from the US last year, and the nation’s auto sales in 2010 are forecast to reach 17 million units – an increase of about 25 per cent year-on-year.

Geely is the first carmaker to create an online dealership on Taobao, the Chinese e-commerce giant said. The car company also has plans to offer models that will only be available online, it added.

Consumers must put down a deposit of 288 yuan ($43) online and then visit the nearest Geely showroom to test-drive the car and confirm the purchase, according to the statement.

Geely bought Sweden’s Volvo from US auto giant Ford for $1.5 billion in August, less than a quarter of what Ford paid for the company in 1999.

It has said it wants to expand Volvo’s presence in China and other emerging markets, but Volvo was not immediately part of its Taobao initiative.