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Volvo CE takes a dual-brand approach in China

(China Daily)
Updated: 2007-11-06 15:21

The next important phase is to understand what the Lingong management needs in order to support the current business. And secondly, to identify the synergies this investment offers to both Volvo and Lingong.

We have worked very closely with the Lingong management team to clearly understand what they need to support the current business.

Q: What role is LingongChina's fourth largest producer of wheel loaders, playing in Volvo CE's China strategy? How does Lingong's dealer network contribute to Volvo CE's China sales? How does the dual-brand strategy work?

A: Lingong plays a very important role not only for Volvo CE China, but in Volvo CE global strategy. For example, the potential to develop Lingong to become an industrial hub, capable of producing products and components as an integrated part of Volvo's industrial network.

We see real possibilities to generate sales through Volvo's distribution network in select markets such as India, Latin America and Russia.

Volvo has strong distribution throughout the world and we are exploring ways in which we can use this network to Lingong's advantage through dedicated dealerships.

With Lingong, we have added a strong Chinese brand to our family.

Our strategy is to be a dual-brand company, which means we will maintain a distinction between the Volvo and Lingong brands and where possible maximize both market opportunities.

Q: Volvo CE's sales jumped by 24 percent in the second quarter, while its China sales increased 54 percent in the same period. What proportion does China contribute to the company's Asian and global sales?

A: Volvo CE is currently the biggest business area in China of all Volvo companies. We're also getting a contribution from the acquisition of Nissan Diesel in Japan and seeing strong growth in China.

Q: Volvo CE acquired the road development division of US firm Ingersoll Rand (IR) in April this year. How will it integrate and merge this business in China? Any future expansion and acquisition plans in China?

A: IR has not fully integrated into the Volvo CE business globally. In China, we have moved its production from Wuxi in East China's Jiangsu Province to Linyi. The road roll just started production last week in Linyi.

With Lingong and IR joining the CE business, China has become one of the most important strategic markets for us. Currently, we are concentrating and working with Lingong on integration.

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