Volvo ended with China Heavy Duty Truck

According to Beijing Times, Yesterday, the Volvo Group announced to end the six-year-long “marriage” relationship with China Heavy Duty Truck Group which locates in Jinan. 50% of the shares of the JV will be completely transferred to Heavy Duty Truck Group. Thus this unhappy combination finally came to an end.

June 9th, 2003, after nine years’ negotiation, China Heavy Duty Truck Group and Sweden Volvo established a co-funded JV named Jinan Huawo truck Co., Ltd.

This is the first approved heavy-duty automobile co-funded project. According to the contract, the cooperation period was 30 years. Besides, the two sides each gave 50% funds. By the end of March of the following year, the first China-made Volvo truck was finished.

Yesterday, Jiang Lan, vice president of Volvo Group, told reporters that since the introduction of models was not successful and the domestic policies were getting changed, these six years this project was under poor management. “Rather than drag, it is better to separate so that we both sides can concentrate on independent stems.” Jiang Lan said with resignation.

No one is willing to quit a project negotiated for nine years, but the domestic production of Volvo trucks has been very small because of the high price. Some insiders of China Heavy Duty Truck Group have disclosed that so far in fact the plant has been discontinued for two or three years.

Reporters learned that after the Volvo Group acquired Japan’s Nissan Diesel and China Heavy Duty Truck Group obtained German MAN company’s 6 billion Hong Kong dollar of the stake in the Hong Kong dollar, the matter to break up is formally mentioned. Through consultations, the two sides soon agreed to lift the JV relationship. Jiang Lan said specifically, how to asset the shares presently transferred was still under discussion.

Though broke up with China Heavy Duty Truck Group, the Volvo’s business will not be weakened. Jiang Lan have declared that the Volvo Group will focus on cooperation with Dongfeng Motor Corporation as well as continually import Volvo and Renault Trucks. In addition, the Construction Machinery, which is its main business in China, will continue to be strengthened.

Previously Nissan Diesel has a JV named Dongfeng Nissan Diesel with Dongfeng Motor Corporation. After Volvo bought Nissan Diesel, naturally came the cooperation between Volvo and Dongfeng. January 22nd, 2007, Volvo revealed to sign t a framework agreement with Dongfeng. The two sides soon discussed the project to co-produce commercial vehicles.

　　Background:

Volvo Group and Volvo Motor now share the "VOLVO" brand but have no capital relationship. Volvo Group’s main business are construction machinery and trucks, not involving in cars. The company is now the world’s second-largest truck company.（translator：Yalong/ Jessie）

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