Volvo Trucks on Monday said that it has signed a joint venture agreement with China National Heavy Truck Corporation, CNHTC, for production of trucks, Dow Jones reported.
The report said the registered capital in the joint venture company is 60 million euros, split equally between the two parties. The company reportedly said that production is planned to commence by the end of this year.
According to Dow Jones, Volvo Trucks said that the market for heavy trucks in China has increased quickly, with strong economic growth and the massive investments in China’s infrastructure boosting transport demand.
The new company founded within the frame of the joint venture will be named Jinan Huawo Truck Co., Ltd with 50/50 ownership between the two parties, the report said, adding that production will start by the end of 2003 in CNHTC’s premises in Jinan, in Shandong province, with initial capacity of 2,000 FL, FM9 and FM12 trucks per year.
Volvo Trucks said that its ambition is to increase volume to 10,000 trucks per year by 2010 with a high level of local content, Dow Jones said.