Volvo puts partnership with Russian tank maker Uralvagonzavod on hold

STOCKHOLM Wed Apr 9, 2014 5:39am EDT

The company logo is seen on the bonnet of a Volvo car during the media day ahead of the 84th Geneva Motor Show at the Palexpo Arena in Geneva March 5, 2014. REUTERS/Arnd Wiegmann

The company logo is seen on the bonnet of a Volvo car during the media day ahead of the 84th Geneva Motor Show at the Palexpo Arena in Geneva March 5, 2014.

Credit: Reuters/Arnd Wiegmann

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STOCKHOLM (Reuters) - Sweden's Volvo (VOLVb.ST), the world's second biggest truck maker, has put a partnership with Russian battle-tank maker Uralvagonzavod on hold due to increasing tensions between Ukraine and Russia, the truck maker said on Wednesday.

The early-stage partnership between Volvo's trucks business in France and Uralvagonzavod (UVZ) was announced in September last year when the two companies said they would jointly develop a new armored vehicle.

"We have paused (the discussions) and thereby pushing the cooperation ahead in time. And the reason for that is the situation in Crimea, which we see as an uncertainty factor," a Volvo spokeswoman told Reuters.

She said Volvo needed time to discuss the issue with the French authorities, and that no decision had been taken to end the partnership with UVZ.

The West has imposed sanctions on Russia for its annexation of Crimea, which has become the worst East-West confrontation since the Cold War ended two decades ago.

Ukraine has been in turmoil since late last year when President Viktor Yanukovich rejected closer relations with the European Union and tilted the country back towards Russia.

That provoked mass protests which ultimately drove Yanukovich from office.

The West is concerned about what it says has been a buildup of Russian forces along the border with Ukraine which Moscow has said are exercises.

(Editing by Jane Merriman)

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