Dongfeng leaders meet with government officials to discuss partnership with Volvo

Gasgoo.com (Shanghai December 6) - The much touted partnership between Dongfeng's commercial vehicle division and Swedish manufacturer Volvo looks like it may finally come to fruition next year. According to a report on Economic Observer News, the two sides have agreed to establish a new joint venture company in 2012, with Dongfeng holding the majority share of 55 percent. The new partnership hinges on Nissan, who would pull their investments from Dongfeng's commercial vehicle division, who in return would support domestic production and sales plans for the Infiniti and Renault brands.

The new joint venture will have its headquarters based in Hubei's northwestern city of Shiyan. According to sources close with Dongfeng, top executives from the manufacturer met with city officials last week. Dongfeng CEO Xu Ping reportedly discussed the idea of the Volvo partnership with them.

Cooperation between Dongfeng and Nissan goes back as far as 2003, when both companies began operating in the field of commercial vehicles. However, Chinese regulations stipulate that foreign companies have no more than a 50 percent stake in a foreign venture with a domestic manufacturer. Therefore, for the agreement with Volvo to work, Nissan would have to remove their investment. the settlement reached between the three companies was that Nissan would remove all of its funding on the condition that Dongfeng aid in helping Nissan begin domestic production of the Infiniti, and later, Renault brands.

Renault-Nissan Alliance CEO Carlos Ghosn has previously mentioned the importance of the Chinese market to Nissan. With the introduction of Chinese made Infinitis, the manufacturer would be one step closer in catching up to rivals GM and VW.