• Sweden edition
 
Volvo takes pole after China truck purchase

Volvo takes pole after China truck purchase

Published: 26 Jan 2013 09:41 GMT+01:00
Updated: 26 Jan 2013 09:41 GMT+01:00

Swedish truckmaker Volvo claims to have become the largest global manufacturer of heavy trucks after completing the purchase of 45 percent of Chinese firm Dongfeng Commercial Vehicles (DFCV).

The firm announced on Saturday that it had agreed to pay almost 5.8 billion kronor ($900 million) for the stake in the Hubei-based firm, which is a newly formed subsidiary of Dong Feng (DFG).

"The deal is a fantastic opportunity for us, and gives us a strong position in the world's largest truck market. The Chinese market is as big as USA's and Europe's combined," said Volvo's spokeswoman Kina Wileke to the TT news agency.

The deal is conditional on the approval of competition authorities and is expected to take around 12 months to complete. But according to Wileke it establishes AB Volvo as market leader within heavy trucks, overtaking Daimler.

"Dong Feng and AB Volvo sold a combined 400,000 heavy and medium duty trucks in 2011," she pointed out.

Volvo will make payment of the some 5.6 billion Chinese Yuan sales price at the completion of the deal. Dong Feng will retain the remaining 55 percent in DFCV.

The deal will increase AB Volvo's net debt by around 6 billion kronor and the firm declined to specify how the purchase will be financed.

"We are not telling," Kina Wileke said.

According to Wileke, the deal is the largest single industrial investment by a Swedish firm to date in China and she assured that there are no plans to shift jobs from Sweden to China.

"As it looks now we are not going to move any jobs from Sweden to China as a result of this deal, on the contrary it creates employment. When we create jobs overseas, it also creates jobs in Sweden," she said.

AB Volvo's CEO Olof Persson called the partnership with Dong Feng "the best of both worlds" in a press statement.

"Dong Feng is a partner we know well, which we have worked with over the course of several years and which has a leadership and a product assortment which we really like," he said.

Persson identified benefits for both firms from the deal, pointing out the "excellent opportunities for economies of scale within purchasing, development and production within Volvo concern's truck operations".

DFCV holds a market share in China of around 16.1 percent within heavy duty trucks and 15.7 percent within medium-duty trucks. The firm has 28,000 employees.

The firm's head office is located in Wuhan in Hubei province and its truck operations and manufacture are concentrated in Shiyan, also in Hubei.

TT/The Local/pvs (news@thelocal.se)

Don't miss...X
Left Right

Your comments about this article

16:57 January 26, 2013 by Just_Kidding
...how the purchase will be financed?

Easy to guess! from the sale of Volvo Aero to GKN.
Today's headlines
Ikea to introduce 'green' vegetarian meatballs

Ikea to introduce 'green' vegetarian meatballs

Swedish furniture giant Ikea is planning to put vegetarian meatballs on the menu in an attempt to cut down on its carbon footprint, the company has announced. READ () »

Students to keep paying off debt beyond 67

Students to keep paying off debt beyond 67

The Swedish government has proposed scrapping the 25-year span for repaying student loans, by suggesting those who attend higher education should keep paying the money back well into retirement. READ () »

Drowned puppies found in crayfish cage
The crayfish cage in the picture is not the one mentioned in the story. Photo: Christine Olsson/TT

Drowned puppies found in crayfish cage

Police in eastern Sweden have launched a preliminary investigation of animal cruelty after two puppies were found drowned in a crayfish cage. READ () »

Three rescued after cruise ship sinks boat
Rickard Rundgren Björk of the coastguard services speaks to the media after the rescue operation on April 19th 2014. Photo: Maja Suslin /TT

Three rescued after cruise ship sinks boat

Three Saturday morning sailors had a lucky escape after their small boat collided and sank after it crashed into a cruise ship whilst sailing in the Stockholm archipelago. READ () »

Missing Swede found alive and well in UK
Sofie Marie Jansson. Photo: Metropolitan Police

Missing Swede found alive and well in UK

British police have found the missing Swedish girl Sofie Jansson in London, exactly a week after she was last seen, with authorities saying she is doing well. READ () »

Social Democrats make tax pledge to elderly

Social Democrats make tax pledge to elderly

Sweden's opposition party has stepped up its efforts to secure the pensioner vote by pledging to lower taxes for the elderly and make higher earners pay more. READ () »

Malmö Nazi attack victim on the mend
Showan Shattak pictured in Malmö before his attack. Photo: Facebook

Malmö Nazi attack victim on the mend

The 25-year-old man, whose stabbing by neo-Nazis sparked mass demonstrations across Sweden, has made a strong recovery in hospital and took to social media to thank supporters for campaigning against fascism. READ () »

Police seeking missing Swede in London

British police have issued a plea for tips in the search to find Swedish national Sofie Marie Jansson who hasn't been seen for almost a week. READ () »

University applications rocket to record high

University applications rocket to record high

Swedish universities continue to draw vast amounts of applicants with the number of prospective students seeking a third level education increasing for the seventh year in a row. READ () »

Man jailed in US over Lars Vilks murder plot
Swedish artist Lars Vilks pictured in New York in 2012. Photo: Linus Sundahl-Djerf/TT

Man jailed in US over Lars Vilks murder plot

American authorities have sentenced a 20-year-old accomplice of 'Jihad Jane' to five years in prison for an attempted terror plot to kill Swedish artist Lars Vilks, after getting involved with the murder plans when he was a teenager. READ () »

RECEIVE OUR NEWSLETTER AND ALERTS
TT
Society
Kids in Victorian garb mark Swedish Easter
Shutterstock
National
Swedish MP ordered chemtrail probe
Society
Swedish supermarket Ica pulls contested Easter commercial off air
Kungahuset
Society
Swedish royals set baptism date for princess
finest.se
Gallery
People-watching April 16
Politics
Who's the prime minister's heir?
Alfie Atkins
Society
Are children's books the key to families integrating in Sweden?
National
'Sweden Dem protests cater to party's martyr image'
National
'Swedish research grants were fantastic, but now it's like Australia'
Society
Only in Sweden: The ten problems you'd never encounter elsewhere
National
Swedes stopped to take my picture, but didn't look me in the eyes
Business & Money
A swipe of the hand replaced cash and cards in Lund
Advertisement:
YouTube
Features
Video: Oliver Gee finds out how to embrace The Swedish Hug
TT
National
Abba duo hints at reunion
Private
National
Flash mobs hug it out across Sweden
Finest.se
Gallery
People-watching April 11-13
TT
Politics
Swedes to give six-hour workday a go
TT
Society
Aussie choir member wows Abba in Sweden
YouTube
Society
Stockholm magic a surprise YouTube hit
Fastighetsbyrån
Society
Gallery: The Local's Property of the Week
Private
Society
Swedes find 200-year-old gravestone in living room
Stockholm School of Economics
Sponsored Article
Why a bachelor's degree is no longer enough
Deepti Vashisht
Features
Deepti Vashisht dissects the magic of Sweden's personal ID number
Shutterstock
Society
Ten signs you've been in Sweden too long
Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Blog Update: The Diplomatic Dispatch

28 October 15:16

The Green Growth Group Summit »

"Today on the 28 October in Brussels, a large group of key EU Ministers and business people, including UK Secretary of State for Energy and Climate Change Edward Davey, and Swedish Environment Minister Lena Ek, will meet to discuss green growth. They all have a stake in resolving a challenge which, although it is crucial..." READ »

738
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com