Volvo In Buying Mode

Posted on April 5, 2006

AB Volvo will consider making major acquisitions as the industry moves toward increased global consolidation, Chief Executive Leif Johansson said. "We will, with great certainty, see continued consolidation in our industries," Johansson told shareholders at Volvo's annual meeting. "Our intention is to participate in such a change, to study potential acquisitions and areas of corporation."

Johansson did not specify what kind of acquisitions the company may consider, but Volvo is increasingly looking to Asia and particularly to China for growth of its key truck business. It said last month it will buy 13 percent in Nissan Diesel Motor Co. Ltd. from Nissan Motor Co. Ltd. for $195 million. In connection with that purchase, Volvo also said it will investigate possibilities for cooperation with China's largest truck maker, Dongfeng Motor Co. Ltd.

"The medium heavy truck segment is particularly interesting," Johansson said. "With a volume of 60,000 to 70,000 trucks, Dongseng is China's largest producer of medium heavy trucks. If we established a well-functioning form of cooperation with the Chinese authorities and Nissan Motor, we would be able to form a very strong global constellation in the medium heavy truck segment," Johansson said.