With the strategic shift, Steyr now accounts for less than 10% of China National Heavy Duty Truck (CNHTC)'s heavy-duty truck production. July 24th, 2024 – (Reporter Li Song) Six years ago, after a nine-year romance between CNHTC and Volvo, the two giants finally entered into a joint venture by establishing Jinan Huawo Company. However, this long-awaited partnership is now on the verge of breaking up. According to recent reports, CNHTC and Volvo have officially agreed to terminate their contract, and the two parties are expected to part ways soon. Since July 15th, CNHTC announced in Hong Kong that it would invest 6 billion Hong Kong dollars from German company MAN to join Sinocchem's listed subsidiary. This move has further fueled speculation about the breakup of the CNHTC-Volvo partnership. In recent years, rumors of a potential split have surfaced repeatedly due to the lack of success in their collaboration. “The two sides have indeed agreed to end the contract,” confirmed an official from the Heavy Industry Group’s Public Relations Department in an interview. “Both parties feel that cooperation has become too difficult. Rather than dragging on, it’s better to part ways.” The official added that the decision was made before MAN’s investment in China National Heavy Duty Truck (Hong Kong) Limited was announced. “The project was relatively simple—Volvo provided parts, production at the joint venture factory, and handled sales. The plant in western Jinan is not large, and since the assets involved are small, the procedures for the breakup will be completed soon.” When the reporter tried to contact Beijing Volvo (China) Investment Co., Ltd. for confirmation, no clear response was received. The partnership began in June 2003, when CNHTC and Volvo signed an agreement in Beijing after nine years of negotiations. They jointly established Jinan Huawo Truck Co., Ltd., which became the first domestically approved heavy-duty truck joint venture. According to the contract, the joint venture had a 30-year term and a total investment of RMB 1.6 billion, with both parties holding equal shares. By the end of March the following year, the first domestic Volvo truck rolled off the line. However, due to high pricing, sales were poor, and the plant eventually shut down two or three years ago. According to an official, the collaboration faced challenges due to Volvo’s restrictions on core technology and its control over sales. With CNHTC now partnering with MAN, many believe the split was inevitable. “Flash marriages” are rare among young people today, but why did CNHTC, a 90-year-old company, break up with Volvo just six years after their marriage? Rumors of a split have circulated for years. In reality, the joint venture has been more of a name than a successful operation. Its output was minimal, and due to high prices, the plant was eventually shut down. It is said that the two sides had already decided to separate, but no one wanted to make it public. However, the poor performance of the joint venture didn’t bring the expected profits. For CNHTC, this wasn’t the main reason. Steyr technology helped CNHTC become a leader in China’s heavy truck industry. But after 20 years, Steyr’s platform became outdated. CNHTC hoped to gain new technical support through collaboration with Volvo. It is said that shortly after the partnership, a heavy truck used Volvo’s cab technology, which upset Volvo. But they had to accept it due to previous arguments. In reality, the joint venture, Jinan Huawo, only assembled various components into complete vehicles, with limited technological value. From such a partnership, CNHTC struggled to obtain the technology it needed. In 2004, CNHTC signed an engine cooperation framework with FAW and Volvo, but the project never moved forward and has been largely forgotten in recent years. Alongside the MAN partnership, CNHTC raised over HK$6 billion and gained access to MAN’s technology. This reduced Volvo’s value in terms of technology transfer. Moreover, it’s unlikely that heavy trucks would use technologies from both companies simultaneously. At the same time, the trucks produced by the joint venture were branded as Volvo, which conflicted with CNHTC’s strategy. After restructuring, building its own brand became a key objective. Although Steyr was once synonymous with Chinese heavy trucks, the company gradually abandoned it in favor of its own brand, HOWO. Today, Steyr-branded trucks account for less than 10% of total production. Expanding into overseas markets is another major goal for CNHTC. It is reported that when CNHTC exported cars under the Steyr brand, it soon received legal notices—because Steyr could only be used within the country. This pushed CNHTC to strengthen its own branding and launch SINOTRUK, a brand focused on exports. After the Volvo joint venture, the HOWO brand was introduced, with the Chinese name "Hoover." This reportedly also caused dissatisfaction at Volvo. For a company like CNHTC, which has increasingly emphasized its own voice in recent years, the decision to shift focus from Volvo to MAN was driven by these two key factors: technology and branding.

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