Volvo Construction Equipment (Volvo CE) has agreed to sell its entire 70% stake in Chinese firm SDLG (Shandong Lingong Construction Machinery Co) to a Lingong Group–controlled fund for SEK 8 billion (≈ US $837 million). The deal, expected to close in H2 2025, will deliver a SEK 1 billion boost to operating income, though a SEK 1.6 billion tax cost is anticipated.
Launched in 2006, the SDLG partnership once provided Volvo CE with key access to China’s massive construction market. Now, with intensifying competition among domestic players and the rising demand for electric and digital solutions, Volvo CE joins SDLG in shifting to independent strategic paths.
Moving forward, Volvo CE will hone its focus on premium branded products and services, targeting niche customer segments like mining, quarrying, and heavy infrastructure. The company will deepen its use of China’s production network and upgrade its Jinan Technology Center (JTC) as a global development hub.
This pivot reflects Volvo CE’s evolving global strategy—the exit from China’s mid-market via SDLG, alongside deeper investment in premium and export-oriented operations—aimed at aligning with sustainability goals and maintaining technological leadership.
