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China Daily Website

Dongfeng Motor, Volvo to set up truck JV

Updated: 2013-01-23 19:40
( chinadaily.com.cn)

China's Dongfeng Motor Co Ltd will sign an agreement with Sweden's Volvo Group, the world's second-biggest truck maker, on Jan 26 in Beijing to set up a joint venture to produce medium- and heavy-duty trucks.

China Business News reported that the new joint venture will be located in Shiyan, Hubei province, which is also the production base for Dongfeng commercial vehicles. An engine factory will be also built in addition to factories for general assembly, welding, painting and stamping.

Dongfeng Motor refused to disclose detailed financial figures for the joint venture, but said that the shareholding ratio between the two parties will be 55:45, with Dongfeng Motor as the majority shareholder.

According to the agreement, Dongfeng Motor will be responsible for production, while Volvo will provide technology solutions.

In 2012, about 19.3 million vehicles were sold in China, up 4.33 percent year-on-year. Sales for passenger vehicles increased slightly, while commercial vehicles saw negative growth.

Dongfeng Motor ranked No 2 in terms of sales in 2012, with 3.08 million units sold, among which 2.45 million units were passenger cars and 620,000 units were commercial vehicles.

Volvo Group entered into the Chinese market 10 years ago. In June 2003, it jointly invested 1.6 billion yuan with China National Heavy-Duty Truck Corp, to set up Jinan Huawo Truck Corp, which produced only around 200 trucks in 2005. The joint venture came to an end at the beginning of 2006. Three years later in 2009, CNHTC said it would stop cooperating with Volvo Group.

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