Volvo Penta builds assembly plant in China

VOLVO PENTA BUILDS ASSEMBLY PLANT IN CHINA Volvo Penta has now commenced construction work on a plant for assembling and distribution of diesel engines and generator sets in Wuxi, China. Volvo Penta will account for 70 percent of the USD 9 M in the joint-venture investment and Wuxi Diesel Engine Works for the balance. A further USD 1 M will be invested in technician training programs and the transfer of management know-how. "China continues to develop at an extremely rapid pace with a strong need of reliable electrical power. There is a considerable demand for operationally reliable generator sets to supplement and at times replace the fixed electricity network. Volvo Penta has excellent opportunities to penetrate this market," says Staffan Jufors, President & CEO at AB Volvo Penta. New Plant The joint-venture company, Wuxi Da-Hao Power Company, is now building a completely new assembly plant with the capacity for assembling 5,000 engines a year and a five-year target of 4,000 units per year. The plant, which has a total area of 15,000 square meters, is preliminarily scheduled to be ready for production in January, year 2000. The plant will accommodate the assembly and distribution of Volvo Penta's diesel engines for generator sets. Technology and systems transfer Two years ago, Volvo Penta entered into a joint-venture agreement with Wuxi Sida Industrial Enterprise Company prior to the establishment of an assembly plant. In addition to engine assembly operations, the agreement includes the transfer of technology and systems from Volvo Penta. This transfer of know-how extends to logistics and quality control, purchasing routines and engineering design and production technology. The training of technicians and other personnel from Wuxi has been in progress at Volvo Penta in Sweden for more than 12 months. "The transfer of technical expertise and management know-how is of major value to our Chinese colleagues," says Staffan Jufors. "It will enable us to attain the same production, quality and environmental standards as we maintain in all our production facilities." Initially, the engines and components will to a large extent be delivered to Wuxi from Sweden. Within five years, it is planned that a number of domestically produced components will be used in the engines. China is the world's largest market for engine-powered generator sets. The engines and the generator sets assembled in Wuxi will also be exported to other markets in Asia. COMPANY FACTS Wuxi Diesel Engine Works is Volvo Penta's partner in the joint-venture company, are part of the First Automobile Works. The most important products for Wuxi Diesel Engine Works, which has been in operation for more than 50 years, are diesel engines for trucks and industrial installations. The company currently has approximately 4,500 employees. AB Volvo Penta is based in Sweden and is a leading producer of marine and industrial engines. The company's products are sold in approximately 130 markets. The development and production of diesel engines is carried out in Vara and Skövde in Sweden. Gasoline engines and drive systems for installation in leisure boats are developed and produced in Lexington, Tennessee in the US. The Volvo Penta Group has approximately 1,400 employees. July 9, 1999 For further information, please contact: Bengt Kjellberg, Vice President Corporate Communication, AB Volvo Penta. Telephone: +46-31-66 83 11. Mobile: +46-708-66 83 13. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/07/09/19990709BIT00240/bit0001.doc http://www.bit.se/bitonline/1999/07/09/19990709BIT00240/bit0002.pdf