Volvo Trucks will acquire JMC Heavy Duty Vehicle Co, a subsidiary of China’s Jiangling Motors Co for RMB0.8 billion (NZ$177 million).

The deal, which includes a manufacturing site in Taiyuan, Shanxi province, China, will see the start of production of the new heavy-duty Volvo FH, Volvo FM and Volvo FMX trucks in Taiyuan for customers in China from the end of 2022.

Volvo Trucks has been active in the Chinese market since 1934. During the last couple of years, the strong growth of logistics services, including e-commerce, has led to a surge in the sales of Volvo trucks in the country.

In 2020, more than 4,500 heavy-duty Volvo trucks were imported and delivered to customers in China. In line with the long-term Volvo Group strategy, Volvo Trucks is therefore expanding its business operation in China.

“We are committed to shaping the future of sustainable transport solutions. With our long-standing presence in China, we are growing our sales, and we are expanding our strong network of sales and service points together with our private dealer partners,” said Roger Alm, president Volvo Trucks.

“Over the last couple of years, we have seen a fast development of the logistics markets and an increasing demand for our premium trucks and services,” he said.

“To meet the demand from Chinese transport operators, the time is right for us to establish a regional value chain with our own heavy-duty truck manufacturing in China.”

The operations in Taiyuan will include stamping, welding, manufacturing of cabs, painting and the final assembly of Volvo trucks. After investment, within a few years, the plant will have the capacity to produce 15,000 Volvo trucks per year with the potential to increase the capacity further.