Dongfeng cements Volvo Group joint venture

Chinese manufacturer Dongfeng Motor Group has formalised its co-operation with Volvo Group, sealing the deal on a joint venture that will be owned 55/45 by the Chinese and Swedish companies and set the company on the road to becoming a global force in the truck market.

Dongfeng announced the initiation of the Volvo Group JV at last year’s IAA Show (Transport Operator, 41), where it also revealed its KX truck – a heavy-duty European-styled truck using a Chinese-built 13-litre Cummins engine and automated ZF gearbox.

The joint-venture, Dongfeng Commercial Vehicles Co (DFCV), has a three-point plan: to remain a leading Chinese truck brand, then to develop a solid presence in key growth markets, before entering mature markets and becoming globally recognized and respected. Its product profile will eventually encompass medium and heavy-duty trucks, buses, specialist vehicle chassis and engines and transmissions.

Dongfeng Motor Group chairman Xu Ping said the joint venture would enhance the company’s competitiveness, strengthen its R&D expertise in complete vehicle and key powertrain components, and actively expand its overseas business.

Olof Persson, president and CEO of Volvo Group, said: “The establishment of DFCV entails a fundamental change in the Volvo  Group’s opportunities in the strategically key Chinese truck market, which is the largest in the world.

“Together with Dongfeng, we will build a globally competitive company with excellent potential for growth and profitability inside and outside China.”

Dongfeng Motor Group is considerably larger than Volvo Group: the Chinese company is said to turn over some US$74 billion a year, compared to the Swedes’ $42 billion.