China Knowledge quoted a person familiar with the matter said Sweden-based automaker Volvo Car Corp, owned by Zhejiang Geely Holding Group Co, China largest privately owned automaker has agreed to set up a joint venture with Dongfeng Motor Group Co to principally manufacture heavy trucks.

The person added that Dongfeng Motor will hold a 55% stake in the JV that would be launched next year while Volvo Car will have the remaining 45% stake. The new JV is likely to have its headquarters in Shiyan, Hubei Province.

Volvo Car and Dongfeng Motor have yet commented on the news.

The deal would hinge on the third party Japan based Nissan Motor Corp which owns a 50-50 JV with Dongfeng Motor to produce passenger and commercial vehicles including heavy trucks. But Chinese regulators stipulate that foreign companies have no more than a 50% stake in a foreign venture with domestic autocar makers.

Therefore, Nissan Motor would pull investments from the heavy truck business of Dongfeng Motor, which in return would start domestic production and sales plans for Nissan Motor's Infiniti and Renault brands.

(Sourced from China Knowledge)