Volvo CE Divests SDLG Stake, Refocuses in China

Eskilstuna, Sweden - Volvo Construction Equipment (Volvo CE)., a construction equipment manufacturer, has announced a significant strategic shift in its presence in China by signing an agreement to sell its entire 70% stake in Shandong Lingong Construction Machinery Co., Ltd. (SDLG) to a fund predominantly owned by Lingong Group (LGG), SDLG’s minority owner. The transaction, valued at (USD 84 million) 8 billion SEK, is expected to close in the second half of 2025, subject to regulatory approvals and customary conditions.

The move marks a new phase for Volvo CE, which has held a majority stake in SDLG since 2006. After years of successful collaboration, Volvo and LGG have decided to follow separate strategies. Going forward, Volvo CE will focus on offering its premium Volvo-branded products and services to targeted segments in China - such as mining, quarry & aggregates, and heavy infrastructure, while developing tailored solutions and a sustainable distribution approach for the competitive market.

Mr. Melker Jernberg, Head of Volvo CE, said, “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. 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.” 

Volvo CE will continue to leverage its industrial base in China, including its Shanghai plant and new production lines, to serve local and export markets. It also plans to strengthen the Jinan Technology Center (JTC) for global innovation. As Volvo CE and LGG go their separate ways, Volvo CE sees this move as a chance to focus on premium products, sustainable technologies, and key segments, while capitalizing on China’s strong supplier network to enhance competitiveness.

You must be logged in to respond.