Volvo sells out of engine maker Deutz

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Deutz diesel engine A Deutz TCD 9.0 Stage V diesel Deutz diesel engine

Vehicle maker’s serious ownership foray with German firm ends after five years.

Volvo has sold off its entire shareholding with German diesel engine-maker Deutz.

The Swedish truck maker gains the equivalent of A$296 million, in a move reportedly part of an ongoing cost-saving and profit-boosting strategy that has seen non-core investments curtailed.

Volvo increased its Deutz ownership from 6.7 per cent to 25 per cent in September 2012, with a view to jointly developing a new generation of medium-duty engines for industrial applications. 

The focus then was on a China joint-venture but the push failed and the initiative was wound up in February 2015, with market conditions there blamed.

According to Deutz, the sale of the investment has no impact on the strong business relationship with AB Volvo, which goes back many years.

"We will continue to work together closely with Volvo and will remain an important supplier, particularly in the Construction Equipment application segment," Deutz chairman Frank Hiller says.

"Following the sale of the investment, we can focus on raising our profile as an independent manufacturer of innovative drive systems."


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