Dongfeng Commercial Vehicles Co., Ltd. Joint Venture Officially Established
January 26, 2015, Shiyan, Hubei – Exactly two years ago, Dongfeng Motor Group (DFG) and AB Volvo signed a master cooperation agreement to form a 55/45 commercial-vehicle joint venture in China. Today marks the establishment of the joint venture, named Dongfeng Commercial Vehicles Co., Ltd. (DFCV), ensuring excellent opportunities for the Dongfeng brand to grow both inside and outside China.
DFCV will develop, manufacture and sell Dongfeng-branded vehicles. Its products cover a full range of medium-duty trucks (MDT) and heavy-duty trucks (HDT), buses, special vehicle chassis, engines and transmissions. By utilizing the technologies and expertise of both shareholders, DFCV will continuously improve its operations, such as product development, product planning, production, sales and marketing. The company will serve both domestic and overseas customers and develop its operations to meet the needs of a growing overseas customer base.
At today’s inauguration ceremony, DFG Chairman Mr. Xu Ping said the establishment of the new joint venture will enhance the competitiveness of DFCV’s core business, strengthen its R&D expertise in complete vehicle and key powertrain components, and actively expand its overseas business, which will increase the competitiveness of the Dongfeng brand in the global market.
Olof Persson, President and CEO of Volvo, has the following comment:“ The establishment of DFCV entails a fundamental change in the Volvo Group’s opportunities in the strategically key Chinese truck market, which is the largest in the world. Together with Dongfeng, we will build a globally competitive company with excellent potential for growth and profitability inside and outside China.”
Huang Gang, President of DFCV, says:“ DFCV will cooperate based on the principles of respect, trust and win-win. We are dedicated to strengthening our leading position in China and making Dongfeng Trucks a well-known global brand.”
DFCV’s registered capital is RMB9.2 billion, with AB Volvo owning 45% and DFG 55%. The Board of Directors comprises four members from DFG and three from AB Volvo. The Chairman of the Board and President of the company are appointed by DFG, and the Vice Chairman of the Board is appointed by Volvo. Mr. Zhu Fushou, President of DFG, serves as the Chairman and Mr. Huang Gang is the President of the company.
Since DFG and AB Volvo signed the master cooperation agreement in Beijing on January 26, 2013, both parties have worked together to obtain a series of governmental approvals and plan future business projects. As of today, all of the requisite legal approval processes, for both the Chinese government and the EU Commission, have been completed.
DFCV has now completed a period of two years of preparation leading up to the launch, which has encompassed a process of active communication, interaction and discussion with AB Volvo. The two parties have reached a mutual understanding in their strategic alliance. The deepened knowledge in both value chains also lays a solid foundation for the future development of the new company.
At today’s ceremony, DFCV announced its strategic vision – From Chinese Dongfeng to global Dongfeng– with a three-step roadmap:(1) remain a leading Chinese truck brand, (2) develop a solid presence in key growth markets and (3)in due course enter mature markets and become a globally recognized and respected brand.
Dongfeng Trucks is the leading truck brand in China. The company is also in the process of building a global sales and service system. The Dongfeng Motor Group, with its operating revenue reaching USD 74 billion, is ranked 113th out of the Fortune Global 500 in 2014. The market share of heavy-duty trucks produced by DFCV is 16%, with the sales reaching 150,000 units.
The Volvo Group is one of the world’s leading manufacturers of trucks, buses, construction equipment, marine and industrial engines. The Group also provides complete solutions for financing and service. The Volvo Group, with its headquarters in Sweden, employs about 100,000 people, has production facilities in 18 countries and sells its products in more than 190 markets. In 2013 the Volvo Group’s net sales amounted to about USD 42 billion.