21 March 2006

AB Volvo has acquired 40 million common shares, corresponding to 13% of the shares, in the Japanese truck manufacturer Nissan Diesel from Nissan Motor, with an option to acquire the remaining 6% of the shares from Nissan Motor within four years. The purchase price is approximately SEK billion 1.5 ($195 million).

The transaction strengthens Volvo’s Asian strategy and is intended to provide Volvo with access to Nissan Diesel’s dealer and service network in Japan and Southeast Asia, and create a possibility for further industrial cooperation with Nissan Diesel in such areas as engines and transmissions, said Volvo.

Nissan Diesel is Japan’s fourth largest manufacturer of heavy and medium-heavy trucks, with an annual production of slightly less than 40,000 trucks in 2005. More than 90% of Nissan Diesel’s sales are made through its own dealers. Nissan Diesel has a well-established dealer and service network in Japan, as well as in the rest of Southeast Asia.

With its 19%, Nissan Motor had been the largest shareholder of Nissan Diesel. Nissan, Japan’s second-biggest auto maker, and Volvo both belong to the Renault group. Renault (who sold its RVI truck division to Volvo in 2001) owns about 44% of Nissan and 20% of Volvo.

Volvo and Nissan Motor are also going to assess the possibilities for cooperation in the commercial vehicle business in China together with Dongfeng Motor Co., Ltd. Nissan Motor owns 50% of Dongfeng Motor, which is China’s largest producer of trucks, with an annual production of approximately 170,000 trucks, and one of the largest automotive manufacturers in China. This joint venture covers both commercial vehicles and cars. Nissan Motor, Volvo, and Dongfeng Group intend to evaluate how to develop this joint venture in the area of commercial vehicles.

Source: Volvo | Bloomberg | Reuters