China: Volvo AB and Dongfeng heavy truck venture seen reaching final stages
Wednesday, February 13, 2008, AutomotiveWorld.com
According to the China-based Gasgoo.com, extended talks between Volvo Group and Dongfeng Commercial Vehicle Company have entered what the Global Automotive Sources portal says is the final stage. The two OEMs are to create a 50-50 joint venture in the country's Hubei province to produce Volvo and other brand heavy-duty trucks.An executive from Volvo (China) Investment Company, who is claimed to have been unwilling to be named, denied an earlier report that "Volvo could have to wait years before it could start production of heavy trucks in China with Dongfeng", stating, on the contrary, that negotiations are approaching the deal signing stage.
According to an MoU that Volvo AB and Dongfeng Motor signed a year ago, an official joint venture agreement will be agreed and signed in 2008.
A site has been selected by Dongfeng close to its Wuhan headquarters in Hubei province. According to sources familiar with the joint venture project, there will be two plants, one in Wuhan and the other in Shiyan, the latter city the location of Dongfeng's commercial vehicle production facilities.
The production facilities are expected to have a combined capacity of 200,000upa, while, according to the MoU, both Volvo and Dongfeng-branded trucks will be built, as will engines for the Swedish OEM's Renault Trucks division.
While Volvo Group has sold close to 6,000 trucks in China in recent years, Dongfeng had sales of 188,000 commercial vehicles in its home market last year, the portal states.
Published on Wednesday, February 13, 2008
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