BEIJING Jan 26 Swedish heavy truck producer AB
Volvo said on Saturday it had signed an agreement
with China's Dongfeng Motor Group Co. to create a new
commercial vehicle joint venture in China, pending official
AB Volvo said in a media release it would take a 45 percent
stake for 5.6 billion yuan ($900.25 million).
It said the two firms would form the new venture -- Dongfeng
Commercial Vehicles -- after Dongfeng separates an existing
commercial vehicle unit from the Chinese company's joint venture
with Japan's Nissan Motor Co..
Nissan said that transaction has been agreed with Dongfeng,
although the financial details were not immediately available
and a Nissan spokesman declined to comment.
That existing truck unit has been producing and selling
passenger cars and other light-duty vehicles, as well as heavy
commercial vehicles, since the early 2000s.
"Combining Dongfeng's strong domestic position and know-how
with the Volvo Group's technological expertise and global
presence will offer excellent potential for growth and
profitability in and outside China," AB Volvo President and CEO
Olof Persson said in a statement.
AB Volvo is one of the world's biggest manufacturers of
heavy-duty trucks, selling a total of about 180,000 vehicles in
2011. Dongfeng is an even bigger producer, with total
commercial-vehicle sales amounting to 186,000 vehicles in 2011.
Of those 186,000, AB Volvo said about 142,000 units were
produced by the part of the company that will be included in the
new joint venture.
It said completion of the transaction is subject to certain
conditions, including the approval of relevant anti-trust
agencies and Chinese authorities.
($1 = 6.2205 Chinese yuan)
(Reporting By Norihiko Shirouzu; Editing by Paul Tait)