Ma Chunji, chairman of the China National Heavy Duty Truck Group Co (CNHTC), said on Friday the negotiation between the company and Volvo to establish the joint venture is going on smoothly, and "according to the current procedure, it hopes to get approval by the year's end."

Attempts to set up the JV were stalled last year when CNHTC experienced a financial crisis. Negotiations did not resume until CNHTC restructured and cleaned up its heavy debts earlier this year.

At Friday's press conference, Ma declined to give details on the talks but said the joint venture would help CNHTC, China's third largest heavy-duty truck producer, improve its technology and gain a larger market share.

The joint venture, worth US$200 million, is expected to produce 2,000 heavy-duty trucks annually and expand annual production to about 5,000 within 10 years.

The JV will produce Volvo tractor-trailers and heavy-duty trucks with engines larger than 12 litres.

The project aims to sell its products on the domestic market and export to the Southeast Asian countries as well.

Ma said other competitors, such as Dongfeng Motor and Beiqi Futian Vehicle, are also negotiating with foreign giants to set up joint ventures producing heavy-duty trucks, but "only CNHTC has achieved concrete results in joint ventures."

The chairman said CNHTC and Volvo have reached consensus on most issues and Volvo has expressed its strong wish to enter the Chinese market.

"We have recently visited the headquarters of Volvo, and both sides are confident of the success of the joint venture," said Ma.

He went on to say that the two companies would launch a new round of negotiations this October.

CNHTC has regained its position as the third largest heavy-duty truck producer after restructuring earlier this year.

In the first eight months of this year, the company's sales increased by 72.1 per cent, compared to the same period last year. It now controls 42 per cent of the market for trucks over 15 tons, and 80 per cent of the market for trucks over 20 tons.

Earlier in April, the State Development Planning Commission issued a document that urged the company to speed up its negotiations with foreign companies and "to launch operations as soon as possible."

(chinadaily.com.cn 09/17/2001)