Volvo Trucks said it will oust Daimler as the world’s biggest heavy-duty truck maker following the acquisition of a minority stake in China’s Dongfen Motor Group Co.
The Swedish truck manufacturer has agreed to pay around $900 million for a 45 percent stake in China’s largest truck company.
The two companies will form a joint venture after Dongfen Motor buys out Japan’s Nissan Motor Company from their joint venture in medium and heavy duty trucks.
China “was a little bit of a missing link in our global strategy,” said Olof Persson, CEO of Gothenburg-based Volvo.
“China is the world’s largest truck market with a total market for heavy trucks equivalent to the European and North American markets combined.”
The Chinese market for heavy-duty vehicles totalled 636,000 in 2012 compared with Volvo’s forecast of flat sales of 230,000 and 250,000 in Europe and North America respectively in 2013.
Volvo said it expects to close on the deal, which requires regulatory approvals, within a year.