Volvo CE has signed a contract to sell its 70% stake in Shandong Lingong Construction Machinery Co (SLCM) to the Lingong Group.
Volvo has decided to target focused customer segments in China instead and rely on a broader range of Chinese suppliers than SLCM.
Volvo acquired a majority stake in SDLG In 2006 to gain access to Chinese construction equipment market.
Volvo Group will sell its shares in SDLG for 8bn Swedish Krona (about 拢600m).
Melker Jernberg, head of Volvo CE, said: 鈥淪DLG 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 re-focus. China remains an important market for us, and we aim to capitalise on our opportunities by focusing on sustainable solutions in targeted segments. We also plan to leverage the excellent industrial system in China.鈥�
On the other side of the world, Volvo is buying Swecon, a 拢750m-a-year equipment dealer with operations in Sweden, Germany and the Baltics.
The acquisition includes Swecon鈥檚 entire business scope in these markets, including sales of products and services, aftermarket services & support to customers as well as offices, workshop facilities and 1,400 employees.聽
The acquisition brings Volvo into competition with some of its customers as Swecon also operates a rental business.
It also makes distributions a core business for Volvo Construction Equipment in Europe, alongside manufacturing.
This represents another strategy shift for Volvo. In 2017, for example, it sold its British dealership to SMT, the dealer for Benelux and 18 African countries. Volvo described the sale at the time as part of 鈥渢he general transformation program that is improving the long-term competitiveness of Volvo 颁贰鈥�.
Today Volvo CE鈥檚 Europe sales chief Carl Slotte says: 鈥淥wning and managing most of our retail operations in Europe provides us a competitive advantage to better meet the rapidly changing demands of our customers and drive new business models, while bringing in valuable competence from Swecon.鈥�
The Swecon acquisition is subject to regulatory approval and closing of the deal is anticipated in the second half of 2025.
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