ArvinMeritor, Inc. has announced the formation of two joint ventures with the Volvo Group, expanding ArvinMeritor's capacity to produce commercial vehicle drive axles. The formation has been approved by both companies' boards and is pending normal governmental approvals.
The new arrangement would result in the manufacture and distribution of more than 200,000 axles annually, from an axle manufacturing plant and a foundry located in France.
With this action, ArvinMeritor now becomes one of Volvo's largest global suppliers, providing more than 300,000 axles for commercial truck applications in North America, Europe, Australia, Brazil and India.
"This is truly a win-win-win business arrangement: A win for end-user customers, a win for the Volvo Group and a win for ArvinMeritor and its shareowners. Our long-term supply agreement with Volvo is being renewed and expanded," said Brad Arnold, vice president and general manager of ArvinMeritor's Commercial Vehicle Systems axle business.
A portion of non-drive axles currently made at Volvo's Koping, Sweden, facility, would be shifted to production at ArvinMeritor's Lindesberg, Sweden, facility and to the St. Priest, France joint venture.
Volvo views the new ventures as another step in its strategic alignment with ArvinMeritor for axle supply. In late 1998, ArvinMeritor acquired Volvo's commercial axle manufacturing facility in Lindesberg, Sweden. As part of that transaction, ArvinMeritor entered a long-term supply agreement with Volvo for heavy-duty drive axles, which has now been expanded.