Dongfeng, Volvo join forces in commercial vehicle venture

Dongfeng Motor Group and AB Volvo recently signed a partnership agreement in Beijing, forming a strategic alliance to jointly develop commercial vehicles under the brand of Dongfeng.
According to their agreement, Dongfeng Motor Group will buy back the medium-duty commercial vehicle business and assets in Dongfeng Motor Co., Ltd., a joint venture established in partnership with Japan’s Nissan Motor.
Once completed, most of the business assets will be merged into Dongfeng Commercial Vehicle Co., a 55-45 venture between Dongfeng Motor Group and Volvo. The new venture will develop, manufacture and sell Dongfeng vehicles; products range from heavy-duty and medium-duty trucks to coaches, special-purpose vehicles, chassis, engines and transmissions.
Dongfeng Commercial Vehicle Co. will have a board of seven members, with four named by Dongfeng and the remaining three by Volvo. Zhu Fushou from the Dongfeng side is rumored to become the venture’s chairman.
The new venture will be located in Shiyan, an industrial, fast-growing city in the central Chinese province of Hubei. Dongfeng Motor Group hoped that the sales of Dongfeng-branded commercial vehicles would reach 1 million units in 2013.
Volvo’s Olof Persson stressed that Volvo and Dongfeng would focus on the development of next generation solutions. (February 4, 2013)