Volvo Construction Equipment has announced plans to sell its 70% ownership stake in Chinese construction equipment manufacturer SDLG. The shares will be transferred to a fund primarily owned by Lingong Group (LGG), the existing minority shareholder in SDLG.
The move marks a strategic shift for Volvo CE, which intends to narrow its focus in the Chinese market by targeting premium customer segments and expanding its use of the country’s supplier and production networks. The company says the decision reflects the evolving competitive landscape and its desire to prioritize new technologies and more direct customer engagement.
Volvo first acquired a majority stake in SDLG in 2006 to gain a foothold in China’s domestic construction market. While the partnership has been considered a success, both parties have now agreed to pursue separate strategies moving forward.
Key elements of Volvo CE’s updated China strategy include:
- Narrowed Market Focus: Volvo CE will concentrate on offering premium products and services tailored to sectors such as mining, quarrying, aggregates, and heavy infrastructure.
- Local Production for Global Supply: Its Chinese operations—anchored by an excavator facility in Shanghai—will continue to serve both domestic and export markets. The company plans to leverage China’s industrial capacity and supplier base as part of its global value chain.
- Global R&D Integration: The Jinan Technology Center (JTC) will play a growing role in Volvo CE’s global technology ecosystem, contributing to product development efforts that serve markets worldwide.
The transition signals a broader effort by Volvo CE to adapt to changing market conditions, sharpen its product offerings, and strengthen its long-term innovation pipeline, particularly in areas tied to sustainable construction technologies.
