Volvo departs engine maker Deutz

Volvo Trucks has sold its shares in engine maker Deutz after five years.

Volvo departs engine maker Deutz
A Deutz V8 diesel engine rated to 520kW (697hp)


Volvo has sold off its entire shareholding in 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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