Dongfeng Motor Group truck — TT File Photo
Volvo AB signed an agreement with China’s Dongfeng Motor Group Co. to acquire 45% of a new commercial-vehicles subsidiary of the Chinese company for about $900 million.
The deal will include the major part of Dongfeng’s medium- and heavy-duty commercial vehicle business, known as Dongfeng Commercial Vehicles (DFCV), Volvo said in a statement Saturday.
“Combining Dongfeng’s strong domestic position and know-how with the Volvo Group’s technological expertise and global presence will offer [the venture] excellent potential for growth and profitability in and outside China,” Volvo’s CEO Olof Persson said.
In 2011, DFCV had net sales of about $6.3 billion and operating income of about $190 million, Volvo said, adding that DFCV has about 28,000 employees and sold 142,000 heavy-duty trucks and 49,000 medium-duty trucks in 2011.