Volvo and Jiangling Motors plan to manufacture heavy vehicles, with the purchase of the latter’s subsidiary for SEK1.1bn ($126mn). Production is slated for H2 2022.
The deal includes an assembly plant in Taiyuan, where Volvo plans to produce its Volvo FH, FM, and FMX heavy-duty trucks at an annual estimated capacity of 150,000 units with scope for expansion.
Volvo’s Taiyuan unit will handle the welding, stamping, painting, cab fabrication, and final assembly of the trucks, all destined for the Chinese market, according to an Aug 23 statement.
In 2020, the Swedish brand’s truck sales in China reached 4,500 units, which is why the company considered it was time to establish a local value chain, said Roger Alm, president, Volvo Trucks.