January 28, 2013
In what company executives say was a calculated move to become the world’s largest manufacturer of heavy-duty trucks, AB Volvo announced Saturday that the company will acquire a 45 percent stake in the heavy-truck unit of China-based Dongfeng Motor Group Co. for $890 million.
Upon completion, the move is expected boost Volvo past Daimler as the world’s leading heavy-duty truck maker.
Volvo CEO Olof Persson, in a conference call with market analysts and journalists this weekend, said the move strengthens Volvo’s position in China, an emerging market where sales are expected to grow. Sales of heavy-duty trucks in the U.S. for the foreseeable future are expected to remain flat.
Persson said, upon completion of the acquisition, two firms will form a new entity named Dongfeng Commercial Vehicles.