The Volvo Group is currently the world’s third largest manufacturer of heavy duty trucks and sold one hundred and eighty thousand units in 2011, however it is soon to become the largest producer of heavy duty trucks in the entire world due to the fact it is signing a new contract with Chinese vehicle manufacturer Dongfeng Motor Group Company Ltd (DGF). Dongfeng is currently the second largest manufacturer of heavy duty commercial vehicles in the world, and sold 186,000 units in 2011, 142,000 of which were manufactured by the Dongfeng Commercial Vehicles (DFCV) part of the DFG Corporation.
Volvo will soon acquire 45% of DFCV, and discussing the new partnership, Volvo’s President and CEO Olof Persson said: “This is a very exciting venture that will combine the best of two worlds, strengthening the positions of the Volvo Group and Dongfeng and offering excellent opportunities to both parties. Combining Dongdfeng’s strong domestic position and know-how with the Volvo Group’s technological expertise and global presence will offer DCFV excellent potential for growth and profitability in and outside China.”
The contract, which is worth RMB 5.6 billion, is subject to certain conditions, which means that it will take approximately twelve months until the transaction goes through. However, there is already much excitement in the heavy duty commercial vehicle sector as well as its sister industries such as commercial vehicle insurance as to what new models will be produced by the newly joined companies in the future.
China is already well known for their presence in the heavy commercial vehicle manufacturing industry, and Mr Persson said: “China is the world’s largest truck market with a total market for heavy trucks equivalent to the European and North American markets combined. The partnership between the Volvo Group and DFG will strengthen DFCV’s already strong position in China and provide the company with the right conditions for successful international expansion.”