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Monday, November 25, 2024
Home News Fleet Deutz, Volvo put brakes on Chinese joint venture

Deutz, Volvo put brakes on Chinese joint venture

Deutz and Sweden’s AB Volvo have called off their planned joint venture in China due to weak market conditions in the country, the German engine manufacturer said.

Deutz said in a statement that both companies had agreed that the joint venture, Deutz Engine China Co. Ltd, should not proceed. The venture had been expected to be set up at the end of the year.

“Having completed a thorough and comprehensive review, [the companies] have now agreed that this production company should be wound up given the weak prevailing market situation in China. The joint venture has not yet made any substantial investments,” the German firm said in a statement.

Faced with sluggish growth last year, Deutz reported in November that the volume for new orders in the first three quarters of 2014 had shrunk 10.5% from the same period in 2013.

The company, however, remains optimistic at the Chinese market’s long-term potential.

“It remains our stated objective to use Chinese production facilities in order to meet local demand from AB Volvo and other target customers and, to this end, we will be focusing on our Detz Dalian Engine Co., Ltd. (DDE) joint venture,” said Dr Helmut Leube, chairman of the Board of Management of Deutz AG.

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Jerusha Sequeirahttp://www.meconstructionnews.com
Jerusha Sequeira is a reporter contributing to Big Project ME and Truck & Fleet ME magazines. She writes news and features on topics across the construction, machinery and commercial vehicles industries in the UAE and wider Middle East and contributes to the digital platform daily. She graduated from the American University of Sharjah in 2014 with a BA in Mass Communication/Journalism. Jerusha has previously interned with the local daily Gulf News, and has worked with on-campus publications at AUS.
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