A proposed collaborative deal between Volvo Truck and Dongfeng remains on ice due to political obstacles in China.
According to a report in Dagens Industri, Dongfeng is hopeful the political obstacles to a deal with Swedish Volvo can be overcome, but that requires Volvo to end its existing collaboration with China National.
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Chief Executive at Dongfeng, Huang Gang, said the Volvo’s collaborations with China National hinders a deal with Dongfeng as Chinese legislation bans more than one joint venture between truck manufacturers.
The two sides plan to create a 50-50 joint venture in China to produce Volvo and other brands of heavy duty trucks. A non-binding agreement was signed in 2007, but remains subject to Chinese government approval.
Dongfeng is also rumoured to be interested in Volvo Car and is thought to be itching to launch its own brand of passenger vehicles in China. Acquiring Volvo Car would provide a big boost to those plans.
