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Dongfeng, Volvo set up JV in China

(People's Daily Online)

16:28, January 30, 2013

Edited and translated by Liang Jun, People's Daily Online

On Jan. 26, China's Dongfeng Motor Company Limited and Sweden's Volvo signed an agreement to set up a joint venture - Dongfeng Commercial Vehicle, according to People's Daily on Wednesday.

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.

Commercial cars are the development foundation of Dongfeng Motor Corporation, the parent company of Dongfeng Motor Company Limited, which is an automobile manufacturing company headquartered in Wuhan, capital city of central China's Hubei province and a 50:50 joint-venture between Dongfeng Motor Corporation and Nissan Motors.

Over the past 10 years, Dongfeng Motor Company Limited sold around 7.9 million vehicles, and in 2012, sales of passenger cars topped 1.2 million units and sales of commercial cars exceeded 600,000.

“In recent years, domestic commercial vehicles saw a consecutive negative growth and so we feel it is urgent to expand overseas market”, said Xu Ping, executive chairman of the Board of Dongfeng Motor Corporation.

Experts said after years of independent development, commercial vehicles firms, represented by Dongfeng Motor Corporation, had developed low-cost competitiveness within the framework of domestic rules. While the gap is still a large with world advanced level in the areas such as environmental protection, energy-saving and safety.

Because Nissan Motors, the partner of Dongfeng Motor Company Limited, is lack of resources for commercial cars and has no know-how and experience in heavy-duty trucks, it was not able to meet the company'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 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, according to Zhu Fushou, president of Dongfeng Motor Corporation. Dongfeng Commercial Vehicle, the joint venture, will firstly share Volvo's advanced transmission technology and then jointly develop a global platform to meet the Europe VI emission standard.

Volvo CEO Olof Persson said 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.

Read the Chinese version: 东风与沃尔沃建立商用车战略联盟
Source: People's Daily; Author: Wang Zheng

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