Dongfeng to Joint Venture With Volvo in May 08

SHANGHAI - August 13, 2007: Dongfeng commercial vehicle and AB Volvo are in talks about setting up a joint venture next year, a source from Dongfeng Motors said.

"If nothing goes wrong, the two companies will officially start cooperation by next May," the unnamed sources from Dongfeng Motor said yesterday.

In January, Dongfeng and Volvo signed a draft agreement. Under this draft agreement, AB Volvo will be Dongfeng Motors next partner after Nissan in the commercial vehicle production.

"Star of Dongfeng" light truck

Currently, the two parties are awaiting the approval from Chinese government.

"Dongfeng engine plant is likely to introduce the Renault-made engines and produce it locally,"a Dongfeng Motors official said.

The output and sales of commercial vehicle boomed in the first half of this year. China Heavy Vehicles and Shanxi Heavy Vehicles, whose commercial vehicles sales grew 68.33% and 87.55% respectively in the first half year.

By contrast, Dongfeng Motors' market share in commercial vehicles declined 4%. Thus, Dongfeng Motors is eager to have a new partner to boost its flagging commercial vehicle production.

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