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Business / Auto Global

Volvo to be largest truck maker after Dongfeng deal

(Xinhua) Updated: 2013-01-28 10:00

STOCKHOLM - Swedish truck manufacturer AB Volvo was going to be the largest heavy truck manufacturer in the world after signing an agreement for vehicle cooperation with China's Dongfeng Motor Group (DFG), announced AB Volvo on Saturday.

The Swedish company acquired 45 percent stake of a new established subsidiary of DFG, named Dongfeng Commercial Vehicles (DFCV), for 5.8 billion Swedish kronor ($898 million), said AB Volvo in a statement.

The president of AB Volvo Olof Persson believed the acquirement would give DFCV a great potential for growth and profitability, while describing it as a combination "of the best from the two sides."

The acquirement made by AB Volvo this time had been the biggest industry investment in China by a Swedish company, reported Swedish daily Dagens Nyheter quoting Kina Wileke, the press officer of AB Volvo.

"It is a fantastic opportunity for us and gives us a strong position in the biggest heavy truck market of the world," said Wileke, adding that the Chinese market is as big as total of the United States and Europe together.

According to Wikele, the total sales amount of AB Volvo's and Dongfeng's heavy trucks and medium-duty trucks reached 400,000 in year 2011.

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