Volvo Bus Corporation and the Chinese vehicle manufacturer
Shanghai Automotive Industry Corporation (SAIC) signed several agreements covering
establishment in Shanghai of a joint-venture company for the manufacture and sale of city
and commuter buses. SAIC's current production of about 2,500 buses per year forms a base
for the new joint-venture company's operations.
were signed in Shanghai by Mr Chen Xianglin, Chairman of SAIC and Mr Jan Engström,
President and CEO of Volvo Bus Corporation. The total share capital of the new company
will be USD 54,22 M and the total investment will amount to USD 97 M. Each party will own
50% of the new company.
to long-distance buses, we already today hold a strong position in China. With today's
agreement I am convinced that we secure a place as one of the leading producers in the
growing Chinese market for city buses. We project that China will become the world's
largest market for city buses," says Jan Engström, President and CEO of Volvo Bus
establishment in the long-distance bus segment, Volvo Buses has in recent years been
negotiating with SAIC regarding production of city buses. SAIC is one of China's leading
automotive industries and has previously established companies for car production with
Volkswagen and General Motors. SAIC is also part owner in more than 30 companies for
production of components for the automotive industry, including such partner companies as
Bosch, Visteon, ZF and Valeo.
"SAIC is a
very strong partner and the dynamic and rapidly growing Shanghai region is a favorable
location in many respects. Together with Volvo's product program, this forms a solid
platform for the future," says Jan Engström.
The next step is
to establish the joint-venture company, which can be implemented when the remaining
approvals are received from the authorities. The new company will offer both the
traditional Chinese buses produced today and modern buses from Volvo Buses' product
program. Through a successive transition to
modern products, the company can contribute to making city traffic safer and lowering the
exhaust emissions. Concurrently, as a result of Volvo's quality demands, reliability and
economy can be improved for the operators.