Volvo Penta has now inaugurated its new assembly plant in China for diesel engines and gen-sets. The plant, a joint venture with Volvo Penta's China partner Wuxi Diesel Engine Works, has an annual production capacity of 5,000 engines.

The investment in the new plant, which is located in Wuxi, about 100 kilometers west of Shanghai, totals USD 9 million. Volvo Penta accounted for 70% of the investment and the balance was financed by Wuxi Diesel Engine Works. In addition, Volvo Penta invested another USD 1 million in training of technicians and transfer of management know-how.

The assembly plant has an annual production capacity of 5,000 engines. The goal within five years is to produce 4,000 units per year. Volvo Penta's diesel engines for generator operations and the joint-venture company's own engines will be assembled in the plant. In the future, Volvo Penta's engines will also feature components from Chinese suppliers.

Volvo Penta's engines will be used mainly in China as emergency power plants in applications requiring high capacity and where the demand is exceptionally high for the shortest possible start-up time after a power disruption. China is the world's largest market for diesel-powered generators, with a total market estimated at some 80,000 units per year.

The engines and gen-sets assembled in Wuxi will also be exported to other markets in Asia and the plant's first export order was announced in conjunction with the inauguration. The order comprises 50 12-liter diesel engines for gene-sets and is valued at USD 800,000.

"This is an important long-term investment for Volvo Penta and for the entire Volvo Group," says Staffan Jufors, President of AB Volvo Penta. "Wuxi Diesel Engine Works is a very knowledgeable and committed partner, which we value highly. The investment also secures our desire to continue our establishment in the Chinese market."

Wuxi Diesel Engine Works' most important products are diesel engines for trucks and industrial installations. The company, which is the market leader in China, has been active in the industry for more than 50 years and currently has about 4,500 employees.

(Jan. 10, 2000)

see also: Automotive Intelligence Special NAIAS 2000
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