Volvo CE takes a dual-brand approach in China

(China Daily)
Updated: 2007-11-06 15:21

Volvo Construction Equipment (Volvo CE), a key player in the world's construction equipment industry, acquired 70 percent of Chinese wheel loader maker Shandong Linyi's Lingong Construction Machinery Co (Lingong) in September 2006.

The Swedish company recently said it will double its investment in Lingong to almost $90 million over the next three to four years.

China Daily's Ma Zhenhuan spoke to Keith J Ellis, president of Volvo CE China, about the business, integration of the two firms and its future strategy.

Q: It's been a year since Volvo CE acquired 70 percent of Shandong Lingong. What's your comment on the acquisition and cooperation between the two sides over the past year?

A: At the start of our cooperation with Lingong we identified four important areas: investment and governance; stand-alone business and challenges; and opportunities for synergy and moving forward together.

The investment phase was concerned with all the financial transactions involved in bringing Lingong into the Volvo family. I'm happy to report that the initial investment phase is now complete.

As a result, Volvo is now an equity shareholder in Lingong. We now have a new board, with representation from the senior management of Lingong and Volvo CE. The day-to-day running of the business remains in the hands of the Chinese management team, led by Wang Zhizhong, president and chief executive officer of Lingong.

Since this year the Lingong results are consolidated in our Volvo results. So, from a financial, governance and management point of view, it is very much a part of the Volvo CE family.

(For more biz stories, please visit Industries)

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