Volvo May Restructure Chinese JVs Should Dongfeng Tie-Up Succeed

Shanghai. November 9 (Gasgoo.com) - Truck-maker Volvo may be forced to restructure its other joint ventures (JVs) in China should a tie-up with Dongfeng prove successful, Deputy Chief Executive Jorma Halonen said, according to Reuters.

The executive told an investor meeting in New York (United States) that "negotiations are proceeding well", but that foreign investment regulations in the country limiting automakers to just two automotive JVs in the country may require some changes to its current set-up.

Earlier this year, Dongfeng Motor Group Company announced that it was considering selling a stake in its commercial vehicle venture to Swedish truck maker Volvo AB (VOLV), Newsrating.com reported.

The commercial vehicle unit Dongfeng Motor Co is part of the Chinese company's joint venture with Japanese automaker Nissan Motor Co. Under the joint venture, cars are produced under the Nissan brand name while trucks manufactured are being sold under the Dongfeng brand. The two partners were holding talks with Volvo regarding a possible replacement of Nissan with the Swedish firm as the partner in the venture, Dongfeng Motor said. Nissan will, however, remain as Dongfeng Motor's passenger car and light commercial vehicle partner even after the Volvo deal, the Chinese company stated.

No definite agreement has been reached between the three companies, and any deal would require regulatory approval.