Dongfeng Motor Corporation and Sweden-based AB Volvo set up a joint venture to develop commercial vehicles on January 26 in Shiyan, central China’s Hubei Province.
Under the agreement signed between the two companies on January 26, 2013, Dongfeng and Volvo, holding the shares of 55 percent and 45 percent of the new firm, respectively, set up a jointly owned company to launch a new brand of commercial vehicle named “Dongfeng”.
The new company not only changed the traditional model of joint venture and broke the 50:50 rule of auto joint-venture, but also opened a “post joint-venture era” by using Chinese brands and marching into international market.
Branded products will cover medium and heavy-duty trucks, passenger cars and special purpose vehicles, as well as auto parts including chassis, engines and gear box.
Dongfeng Motor, a major auto manufacturer based in Wuhan, capital of central China’s Hubei, has cooperated with many world-leading carmakers like Renault Group and Nissan Motor. It ended cooperation with Nissan Motor in 2013 for the latter is lack of resources for commercial cars and has no know-how and experience in heavy-duty trucks, unable to meet the Dongfeng’s demand to promote its commercial cars to world famous brands. Therefore, Dongfeng Motor Corporation repurchased the business of medium and heavy-duty commercial vehicles under Dongfeng Motor Company Limited and formed with Volvo the world’s largest strategic alliance of commercial vehicles.
Through complementary advantages and resource sharing, the alliance will jointly develop international leading commercial vehicle business for global market. Dongfeng Commercial Vehicle, the joint venture, will share Volvo’s advanced transmission technology.
With Volvo’s technological superiority and global network, the alliance would better help Dongfeng Commercial Vehicle to go out and will also accelerate Volvo’s pace to tap the Chinese market.
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