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STOCKHOLM Jan 22 (Reuters) - World number two truck maker Volvo has received the first approval by a Chinese authority for its planned joint venture with Dongfeng Motor Group.
The green light from China's National Development and Reform Commission (NDRC), a macro-economic agency, is the first step in a regulatory approval process at the end of which Sweden's Volvo hopes to have gained a major presence in China.
Under an agreement struck a year ago, Volvo will buy 45 percent of a new Dongfeng subsidiary for 5.6 billion yuan ($925 million) which will include the major part of the Chinese firm's medium- and heavy-duty commercial vehicles business.
"Through the approval by NDRC an important step has been taken towards completion of the transaction," Volvo said on Wednesday, adding it expected the deal to be completed mid 2014.
"Completion is subject to certain conditions including the approvals of other Chinese authorities, which have not yet been obtained," it added.
Volvo, with little presence in China after a venture in the world's top truck market by volume turned sour a decade ago, is looking to boost sales by 50 percent in Asia and the Pacific region, with the tie-up with Dongfeng pivotal to the plan.
The Swedish truckmaker has estimated the combination of the heavy-duty trucks business of the two companies would have given it a 16 percent share in the Chinese heavy-duty truck market in 2011 and a similar portion of the medium-duty market. ID:nL4N0AV06D] (Reporting by Sven Nordenstam and Niklas Pollard; Editing by Mark Potter)