Volvo to sell stake in Jinan Huawo Truck Corporation
16 Nov 2009
Volvo, the world's second-biggest truck maker, today said it was pulling out of a stalled venture with the China National Heavy Duty Truck group, selling its stake in Jinan Huawo Truck Corporation and clearing the way for a Volvo tie-up with another Chinese group.
Volvo, the world's second-biggest truck maker said on Monday that it would pull out of a stalled venture with the China National Heavy Duty Truck group, Jinan Huawo Truck Corporation and sell its stake to clear the way for a Volvo tie-up with another Chinese company.
The company said it has struck a deal with Sinotruk and its parent China National Heavy Duty Truck, under which they would acquire Volvo's 50 per cent stake in Jinan Huawo.
Volvo said in a statement, that the joint venture has for various reasons failed to become the business success both partners had expected. Volvo did not disclose the financial details of the deal which is subject to approval by Chinese authorities.
According to analysts it was a collaboration that went bad and would hardly be noticeable in Volvo's large business.
The Swedish truckmakers' venture with China National failed to take off the way it was expected and since its establishment in 2003, produced little more than 1,000 vehicles. This was partly due to new legislation in China affecting demand for its vehicles.