Volvo CE has signed a contract to sell its shares in China-based SDLG (Shandong Lingong Construction Machinery Co). The company will sell its entire 70 per cent stake in SDLG to the Lingong Group (LGG).
Volvo will sell its shares in SDLG for 8 billion SEK in the second half of 2025, subject to regulatory approvals and other conditions.
In 2006, Volvo CE acquired a majority stake in SDLG, with LGG as a minority shareholder. The strategic investment gave Volvo CE access to the important domestic Chinese construction equipment market.
While the collaboration has been successful, Volvo and LGG now believe it would be mutually beneficial to pursue independent business strategies for strategic reasons. Therefore, the parties have agreed that a fund predominantly owned by the LGG will take ownership of Volvo’s SDLG shares.
“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 re-focus, said Melker Jernberg, Head of Volvo CE.
“China remains an important market for us, and we aim to capitalize on our opportunities by focusing on sustainable solutions in targeted segments. We also plan to leverage the excellent industrial system in China.”
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Volvo CE will maintain its strategic focus on leading the development of sustainable solutions in the Chinese construction industry, targeting key segments such as mining, quarries and heavy infrastructure.
The emphasis will be on providing tailored and comprehensive solutions that address specific customer needs while developing a sustainable distribution roadmap suited to the competitive landscape.
Volvo Ce’s operations in China serve as a global production centre. Volvo CE has operated an excavator production facility in Shanghai since 2002 and has recently announced the establishment of new production lines.
Moving forward, China will remain a component of Volvo CE’s value chain and a base for numerous suppliers, both domestic and international. A key component of Volvo CE China strategy is to continue to strengthen the Jinan Technology Center (JTC) into the extensive Global Technology System of Volvo CE, which aims to foster innovation and collaboration on a global scale. This involves ownership of products and establishing a common architecture to be utilized worldwide. Volvo CE remains dedicated to innovation and collaboration globally, ensuring that our solutions not only meet the needs of today, but also pave the way for a sustainable future.
