Volvo Sells SDLG Stake, Refocuses China Strategy

Volvo Construction Equipment (Volvo CE) will divest its entire 70 per cent holding in Shandong Lingong Construction Machinery (SDLG), transferring the shares to a fund largely owned by SDLG’s minority shareholder, Lingong Group Jinan Heavy Machinery (LGG). The disposal, valued at 8 billion SEK, is expected to complete in the second half of 2025 once regulatory clearances are secured.

Explaining the decision, Volvo CE President Melker Jernberg said the 2006 venture had given the Swedish manufacturer vital access to China’s construction-equipment market, yet intensifying competition and the march towards low-carbon technologies now demand a sharper focus. “China remains crucial for us,” he noted, “but we must concentrate on sustainable, premium solutions for chosen segments while leveraging the country’s excellent industrial base.”

Volvo CE will therefore devote its Chinese operations to producing Volvo-branded machines and services for sectors such as mining, quarrying and heavy infrastructure. Its Shanghai excavator plant, in operation since 2002 and recently expanded, will continue to serve domestic and export customers, capitalising on local supply-chain advantages.

Another pillar of the revised plan is the further strengthening of the Jinan Technology Centre, which will be integrated more deeply into Volvo CE’s global R&D network. The aim is to develop common product architectures and accelerate innovation for worldwide markets, ensuring the brand remains at the forefront of sustainable construction solutions.

Both Volvo and LGG described the separation as mutually beneficial, allowing each party to pursue independent growth strategies after nearly two decades of successful collaboration.