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Volvo Buys Into Chinese Wheel Loader Manufacturer

Posted on September 27, 2006

Volvo Construction Equipment said it has signed an agreement to make a 70% equity investment in China’s Shandong Lingong Construction Machinery Co. Volvo CE's investment in Lingong is subject to regulatory approval.

Lingong, based in Linyi in Shandong Province, had a turnover of RMB 2.0 billion (US$ 250 million) in 2005. The company has around 1800 employees. Volvo said Lingong is the fourth largest producer of wheel loaders in China with a market share of around 11% in 2005. Lingong also has a smaller range of backhoe loaders, road rollers and excavators.

Lingong has approximately 170 dealers, a network of service agencies and 10 parts outlets in China. Products are distributed across China and exported to Australia, the Middle East, Malaysia and Mongolia.

Both parties have agreed not to reveal any financial details before the closing of the deal, which is expected to take place in the near future.

“It allows us to strengthen our position, serving customers with different offerings beyond our current premium products,“ said Tony Helsham, president and CEO of Volvo CE. “At the same time, we will continue to develop and produce our high end Volvo wheel loaders in our facilities in Eskilstuna and Arvika, Sweden; Asheville, USA and Pederneiras, Brazil."

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