Nissan Motor Company has finalized an agreement with Swedish automaker Volvo Car Corporation on March 21. Under the deal, Nissan sold its 13% stake in Nissan Diesel Motor Co. to Volvo for $196 million. This strategic move is expected to bolster Volvo’s presence and long-term plans in the Asian market.
Currently, Nissan holds a 19% ownership in Nissan Diesel, making it the largest shareholder. With this transaction, Volvo will now become the top shareholder in Nissan Diesel’s diesel operations, marking a significant shift in the company's ownership structure.
According to reports, Volvo will acquire 13% of Nissan Diesel by purchasing 40 million ordinary shares. This acquisition gives Volvo access to Nissan Diesel’s established distribution and service network across Japan and Southeast Asia. It also opens up potential collaboration opportunities in engine and transmission development. Additionally, Volvo gains the right to purchase an additional 6% of Nissan Diesel’s shares within four years.
Nissan Diesel is Japan’s fourth-largest manufacturer of heavy- and medium-duty trucks, producing nearly 40,000 units in 2005. The company has a well-developed dealer network, with over 90% of its products sold through its own dealers. However, its diesel business has struggled with low profitability and instability, which are key factors behind Nissan’s decision to divest its stake.
In addition, since Nissan holds a 50% interest in Dongfeng Motor, a major Chinese automaker, Volvo and Nissan are also exploring potential partnerships with Dongfeng in the commercial vehicle sector in China. This could lead to new joint ventures and expanded market opportunities in one of the world’s fastest-growing automotive markets.
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