First Automobile Works is to team up with China National Heavy Truck Corp and Volvo, the world's number two truck maker, in a $US105 million plant that will produce 50,000 engines a year by 2010.

According to a news agency report, Volvo will own 52% of that plant, and the two Chinese firms, 24% each.

"The engines will be for sale in China to start with," Jan van Stetten, head of Volvo's truck division in China, told Reuters, adding that exports would be deliberated upon later.

Reuters noted that Volvo last summer Volvo signed a deal to form a 1.6 billion yuan truck joint venture with China National, with an initial capacity of 2,000 trucks per year.