With the shift in strategy, Steyr now accounts for less than 10% of China National Heavy Duty Truck (CNHTC)’s heavy-duty truck production. July 24th – According to reporter Li Song, six years ago, CNHTC and Volvo, who had been in a long-term partnership for nine years, finally entered into a joint venture by establishing Jinan Huawo Company. However, this once-hoped-for collaboration is now on the verge of breaking up. The company has confirmed that both parties have agreed to terminate their contract, and a formal split is expected soon. Since July 15th, SINOTRUK announced in Hong Kong that it would use 6 billion Hong Kong dollars from German manufacturer MAN to invest in a listed company under SINOCHEM. This development comes as news of CNHTC and Volvo’s breakup continues to circulate. In recent years, rumors of the partnership falling apart have surfaced repeatedly due to the lack of success in their cooperation. “The two sides have indeed agreed to terminate the contract,” said an official from the Heavy Industry Group’s Public Relations Department. “Both parties felt that continuing the collaboration was not beneficial. It’s better to end it now rather than drag it on.” The official added that the decision came before MAN’s investment in China National Heavy Duty Truck (Hong Kong) Limited was officially announced. “This project was relatively simple: Volvo provided parts, produced the joint-venture factory, and handled sales. The plant in western Jinan isn’t large, and since the assets involved are small, the breakup procedures will be completed soon,” the official explained. When contacted for further information, Beijing Volvo (China) Investment Co., Ltd. did not provide a clear response. The partnership between CNHTC and Volvo began in June 2003, after nine years of negotiations. The two companies jointly established Jinan Huawo Truck Co., Ltd., which became the first domestically approved heavy-duty vehicle joint venture. According to the agreement, the joint venture was set to last 30 years with a total investment of RMB 1.6 billion, with equal shares from both sides. By the end of the following year, the first domestically produced Volvo truck rolled off the line. However, due to its high price, sales were poor, and the plant eventually shut down two or three years ago. Industry insiders noted that the collaboration faced challenges due to Volvo’s restrictions on core technology and sales responsibilities. With CNHTC now partnering with MAN, many believe the split was inevitable. Despite the brief “marriage” lasting only six years, the joint venture never truly lived up to expectations. Its output was minimal, and the high pricing made it difficult to sell. In fact, some say the breakup had already happened in practice, but neither party wanted to confirm it publicly. While the joint venture didn’t bring the expected profits, it wasn’t the main reason for the split—especially for CNHTC. Steyr’s technology helped CNHTC become a leader in China’s heavy truck industry. However, after 20 years, the platform became outdated, prompting CNHTC to seek new technical support through partnerships like the one with Volvo. Reports suggest that shortly after the collaboration, a heavy truck used Volvo’s cab technology, which upset Volvo. But they had no choice but to tolerate it at the time. In reality, the joint venture, Jinan Huawo, mainly focused on assembling components like engines into complete vehicles, with limited technological value. From such a partnership, CNHTC struggled to gain the advanced technology it desired. A framework agreement with FAW and Volvo for engine cooperation was signed in 2004 but never fully launched. In addition to the partnership with MAN, CNHTC raised over HK$6 billion and gained access to MAN’s technology. This reduced Volvo’s value in the deal, as it was unlikely that heavy trucks would use technologies from both companies simultaneously. Moreover, the trucks produced by the joint venture carried the Volvo brand, which conflicted with CNHTC’s strategic goals. After restructuring, building its own brand became a top priority. Although Steyr was once synonymous with Chinese heavy trucks, CNHTC gradually phased it out in favor of its own HOWO brand. Today, Steyr-branded trucks account for less than 10% of total production. Expanding into overseas markets was another key goal for CNHTC post-restructuring. When CNHTC tried to export under the Steyr brand, it received legal notices stating that Steyr could only be used domestically. This pushed CNHTC to accelerate its brand-building efforts, leading to the launch of the SINOTRUK brand for exports. The HOWO brand, introduced after the Volvo joint venture, even caused some dissatisfaction at Volvo. For CNHTC, building its own brand and securing technological independence have always been crucial. These factors ultimately led to the decision to move away from Volvo and toward MAN.

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