Volvo CE Refocuses Its Presence in China, Divests Shares in SDLG

Volvo CE is divesting its shares in SDLG, originally acquired in 2006, to focus more on sustainable solutions in China’s construction sector. The shift will allow both Volvo and LGG to pursue independent strategies, while Volvo aims to concentrate on premium products. The company continues to view China as vital for production and innovation moving forward. The sale is projected to close in 2025 for around 8 billion SEK.

Volvo CE has announced a major strategic shift regarding its operations in China, divesting its shares in SDLG, a company it acquired back in 2006. Volvo CE’s ownership will transfer to a fund primarily owned by LGG, a minority stakeholder. Initially, the collaboration was fruitful, giving Volvo CE a foothold in China’s construction equipment market. However, both companies now see a benefit in pursuing independent strategies moving forward.

Melker Jernberg, the Head of Volvo CE, noted, “SDLG has served us well since 2006. However, with increasing competition and the need to transform to new technologies, as well as strengthen interaction with customers, we need to refocus. China remains an important market for us, and we aim to capitalize on our opportunities by focusing on sustainable solutions in targeted segments.” He emphasized the need to adapt to changes within the industry while maintaining their competitive edge.

The company plans to concentrate on premium products and services, specifically targeting critical segments of the Chinese construction industry like mining, quarry and aggregates, and heavy infrastructure. The goal is to provide tailored solutions that meet customer demands while navigating a highly competitive landscape, therefore contributing to a sustainable future through innovative distribution strategies.

Volvo CE’s operations in China will continue to function as a globally competitive production center, supporting both domestic and international markets. Since 2002, the excavator facility in Shanghai has been integral to their strategy, and new production lines are set to be established there. Going forward, China will play a vital role in Volvo’s supply chain, fostering collaboration with both local and overseas suppliers.

Moreover, strengthening the Jinan Technology Center is key to Volvo CE’s future strategy in China. The center will integrate with the Global Technology System to enhance product development opportunities. This initiative aims to enable global innovation while ensuring that product offerings address not only immediate customer needs but also sustainability goals for the future.

Volvo Group is expected to finalize the sale of its SDLG shares for approximately 8 billion SEK. The closure of this deal is anticipated in the latter half of 2025, contingent on the necessary regulatory approvals and other conditions.

Contact details for further inquiries have been provided by the Head of Strategic Communications at Volvo Construction Equipment, Asa Alstrom, who can be reached at [email protected].

In summary, Volvo CE’s decision to divest its shares in SDLG marks a strategic pivot aimed at enhancing its focus on sustainable solutions within select market segments in China. By streamlining operations and continuing to invest in product development through the Jinan Technology Center, Volvo is positioned to leverage its long-standing presence in China while adapting to increasing industry demands. The sale, expected to be completed by 2025, reinforces Volvo’s commitment to maintaining a competitive edge in a rapidly evolving market.

Original Source: www.volvoce.com

Related posts:

BYD’s Investment in Brazil: A New Era for Camacari and the EV Market Tesla Halts New Orders for Model S and Model X in China Amid Trade Tensions BYD Expands Operations in Brazil, Surpassing U.S. Rivals in EV Market BYD’s Expansion in Brazil Encounters Challenges Amid Tariff Controversy