AB Volvo subsidiary Renault Trucks has signed an agreement in principle with Chinese truck manufacturer Dong Feng Motors aimed at establishing a joint-venture company for manufacturing trucks and truck components in China.
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The new company plans to make Renault’s Kerax heavy construction trucks for the Chinese market.
The agreement, signed in Paris, will see Renault Trucks acquire a share of the capital in Dong Feng Liuzhou Motors (DFLZ), a Dong Feng subsidiary. The agreement is still subject to final negotiation with over price and ownership interests and must also be approved by Chinese authorities. The goal is for the agreement to be finalized this year.
Initially, the agreement intends to establish local assembly of CKD kits for Renault’s Kerax trucks. The long-term aim, however, is to manufacture components, primarily cabs, for Renault’s and DFLZ’s Chinese product range.
DFLZ mainly manufactures heavy trucks and sold 20,000 trucks in the Chinese market last year. It is planned that, in five years, Renault will be able to produce 7,000 trucks a year locally for the Chinese market.
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By GlobalDataIn October 2002, Renault Trucks signed an agreement with Dong Feng Motors regarding a transfer of technology relating to Renault’s 11-litre dCi 11 engine, the start of collaboration between the two companies.
