Wednesday, 7 January 2015
Volvo completes on Dongfeng
Volvo has completed the acquisition of 45 per cnet of Chinese truck manufacturer Dongfeng Commercial Vehicles (DFCV) in a deal worth 5.5 billion yuan (approximately £600 million).
First announced in January 2013, the agreement has now been approved by the Chinese authorities. The remaining 55 per cent of DFCV remains with parent company Dongfeng Motor Group.
DFCV manufactures medium- and heavy-duty trucks and controlled 15% and 18% of these markets respectively in China for 2013.
"This strategic alliance is a real milestone and entails a fundamental change in the Volvo Group's opportunities in the Chinese truck market, which is the largest in the world," says Olof Persson, Volvo's president and chief executive officer.
Volvo says the agreement will be recognised with the formation of an associated company
It is interesting that on the same day Volvo has made this announcement, another Swedish company, SinterCast, has also been able to make an announcement in connection with Dongfeng – see news story below. Volvo is now fully linked to Dongfeng and to compacted graphite iron (CGI) material for diesel engine cylinder blocks and heads.