Volvo, Dongfeng to build joint venture

China's homegrown carmaker Dongfeng Motor Corporation signed an agreement on Saturday with Sweden-based AB Volvo to jointly develop commercial vehicles.

Under the agreement, Dongfeng and Volvo, holding the shares of 55 percent and 45 percent of the new firm, respectively, will set up a jointly owned company to launch a new brand of commercial vehicle named "Dongfeng."

Branded products will cover medium and heavy-duty trucks, passenger cars and special purpose vehicles, as well as auto parts including chassis, engines and gear box.

Dongfeng Motor, a major auto manufacturer in China, has cooperated with many world-leading carmakers like Renault Group and Nissan Motor.

The company produced 264,017 vehicles in 2012, down 17.79 percent from the previous year, while its sales decreased 17.5 percent to 263,210 units, according to a report filed on Jan. 14 with the Shanghai Stock Exchange by its listed company, Dongfeng Automobile Co..