• Sweden's news in English
 
app_header_v3

Volvo takes pole after China truck purchase

TT/The Local/pvs · 26 Jan 2013, 09:41

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

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.

Story continues below…

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)

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
Coeliac disease not caused by early weaning: Swedish study
Carin Andrén Aronsson now plans to investigate why Sweden has such high levels of coeliac disease. Photo: Polarbrod

Mothers who stop breastfeeding early are not to blame for their children developing gluten intolerance, a new Swedish study has found.

Zlatan look-a-like storms pitch as Man U take on champions
A grinning Zlatan pushed the man away with the palm of his hand. Photo: YouTube

Zlatan fever has hit the UK, with a look-a-like storming the pitch on Saturday only to be palmed off by the grinning Swedish football star.

Russian Sweden Democrat aide resigns over suspect deal
'Egor Putilov' had access to all areas of the Swedish parliament: Photo: Riksdag

A Russian-born political secretary for the Sweden Democrats has resigned after making six million kronor ($0.7m) in a property deal with a St Petersburg businessman.

Trump an 'embarrassment' Springsteen tells Sweden
Bruce Springsteen tells SVT talk show host that Trump is an 'embarrassment' to the US. Photo: SVT/Youtube

Rock legend Bruce Springsteen has described Donald Trump as an embarrassment to the United States, in an interview on Sweden's Skavlan talk show.

'World class' developer told to leave Sweden over admin slip
Software developer Tayyab Shabab. Photo: Private

Tayyab Shabab has a house, a job and pays tax in Sweden, but he has now been told he must leave within three weeks.

Police release men held over bomb threat on refugee home
Police officers outside the building. Photo: Robert Nyholm/TT

UPDATED: Two men arrested after a bomb threat was made against a home for refugees in Boden, northern Sweden, have been allowed to leave custody.

Embassy: No-go zones 'do not exist in Sweden'
Police on the Serbian-Hungarian border. Photo: Sofia Eriksson/TT

Sweden's embassy in Budapest has sharply rebuked Hungary after an official leaflet claimed that Stockholm and other European cities had become "no-go areas".

The Local List
Ten reasons why it's awesome being knocked up in Sweden
Being pregnant in Sweden can be pretty great. Photo: Jessica Gow/TT

US writer Lisa Ferland shares her top reasons why she thinks Sweden is wonderful for expecting mums.

The Local Recipe
Welcome in the autumn with this Swedish tiger cake
Tiger cake and coffee, the perfect combination. Photo: John Duxbury/Swedish Food

Fika: the best part of the day. Make this tiger cake and you'll keep everyone very happy.

Four arrested over Gothenburg riots
File photo of a Swedish police officer. Photo: Maja Suslin/TT

Four people have been arrested in connection with riots in a Gothenburg suburb this week.

Sponsored Article
Let's Talk: a personal Swedish language tutor in your pocket
National
Muslim teacher leaves job after not shaking male colleague's hand
Sponsored Article
‘I view the world in a different way now’
Travel
Why we adore autumn in Sweden
Gallery
People-watching: September 21st
Blog updates

7 September

Svensk or svenska? (The Swedish Teacher) »

"Hejsan! My inbox is full of questions :-). Here’s one about when to use “svensk” and…" READ »

 

23 August

A Summer in Sweden (The Diplomatic Dispatch) »

"For our first year here in Sweden we decided to have all our holidays in Sweden.…" READ »

 
 
 
Sponsored Article
'Creating a sense of home': Collective living in Stockholm
National
Stockholmers hunt killer badger after attack on neighbourhood hipster cat
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
The Local Voices
Why this Russian developer is committed to helping refugees - with tech
National
Six key points in Sweden's budget plan
The Local Voices
How a Swedish name finally made recruiters notice this Iranian's CV
Sponsored Article
Gran Canaria: 'So much more than beaches'
Gallery
Property of the week: Luleå
Sponsored Article
Why Jordan is the ‘Different’ East
Gallery
People-watching: September 16th-18th
Culture
Why Swedish TV has given these kids' trucks a sex swap
Sponsored Article
How to vote absentee from abroad in the US elections
National
TIMELINE: Everything you need to know about the Julian Assange case
Sponsored Article
Why Jordan is the ‘Different’ East
Gallery
People-watching: September 14th
Politics
Why Sweden is putting troops on holiday dream island Gotland
Sponsored Article
Retiring abroad: ensuring your health is covered
The Local Voices
'What I mean when I say: I came here to blow myself up'
Sponsored Article
'There was no future for me in Turkey'
Society
VIDEO: Are Swedes that unfriendly?
Sponsored Article
7 reasons you should join Sweden’s ’a-kassa’
Features
INTERVIEW: How Arthur the jungle dog opened hearts and minds
Gallery
Property of the week: Smögen, Västra Götaland
Society
Sweden's ancient forest tongue Elfdalian fights for survival
National
Where Sweden's foreigners are from
Gallery
People-watching: September 9th-11th
The Local Voices
Shakib, 23, works and pays taxes — but will Sweden let him stay?
National
Watch this Swede roll his kayak without spilling his beer. Respect.
Gallery
People-watching: September 7th
The Local Voices
'Swedes are polarized on refugees - it's the welcome mat or the exit door'
National
WATCH: Yes, this Swedish rising star really is Abba legend's grandson
The Local Voices
'Whenever I apply for jobs I’m treated like an unwanted stranger'
The Local Voices
Is Swedish bosses' ignorance keeping refugees out of jobs?
2,966
jobs available