Renault Trucks concludes agreement in principle to manufacture trucks in China

The AB Volvo subsidiary Renault Trucks has signed an agreement in principle with the Chinese truck manufacturer Dong Feng Motors aimed at establishing a joint-venture company for manufacturing trucks and truck components in China. It is planned that the new company will manufacture Renault’s Kerax heavy construction trucks for the Chinese market.

The agreement, signed in Paris yesterday, enables Renault Trucks to acquire a share of the capital in Dong Feng Liuzhou Motors (DFLZ), a Dong Feng subsidiary. The agreement is still subject to final negotiation with regard to price and ownership interests. The agreement must also be approved by the relevant Chinese authorities. The goal is for the agreement to be finalized during 2004.

Initially, the agreement aims to establish local assembly of CKD kits for Renault’s Kerax trucks. The long-term aim, however, is to manufacture components, primarily cabs, for Renault’s and DFLZ’s Chinese product range. DFLZ mainly manufactures heavy trucks and sold 20,000 trucks in the Chinese market last year. It is planned that, in five years’ time, Renault will be able to produce 7,000 trucks a year locally for the Chinese market.

In October 2002, Renault Trucks signed an agreement with Dong Feng Motors regarding a transfer of technology relating to Renault’s 11-liter dCi 11 engine, marking the start of collaboration between the two companies.
January 28, 2004

For further information, please contact Mårten Wikforss, tel +46 31 66 11 27