Now that regulatory approval has been received from the Chinese authorities, Volvo Group has completed its 45% acquisition of the commercial vehicle subsidiary of Chinese automotive manufacturer Dongfeng Motor Group Company Ltd (DFG).
Volvo Group says the RMB 5.5 billion transaction will strengthen Volvo’s position in medium-duty trucks so it will become one of the world’s largest manufacturers of both medium-duty and heavy-duty trucks.
The Group signed an agreement in January 2013 with DFG, to acquire 45% of it’s subsidiary Dongfeng Commercial Vehicles Co Ltd (DFCV) but had to wait for approval which has just been granted before the transaction could be completed.
DFCV includes most of Dongfeng’s operations in heavy-duty and medium-duty commercial vehicles.
“This alliance entails a fundamental change in the Volvo Group’s opportunities in the Chinese truck market,” says Volvo’s chief executive officer Olof Persson (pictured above).
“It will provide us with the opportunity to become involved in growing DFCV’s international business which will benefit us and our Chinese partner.”
The total Chinese market for heavy-duty trucks amounted to about 774,000 vehicles in 2013, while the figure for the medium-duty truck market was 286,000 vehicles.
DFCV had a leading position in both the heavy-duty and medium-duty segments, with sales of 120,600 heavy-duty trucks and 51,000 medium-duty trucks, corresponding to market shares of 15.6 and 17.8%, respectively.
