Volvo Penta has started construction of a plant to assemble and distribute diesel engines and gensets in Wuxi, China. Volvo Penta will account for 70 per cent of the $9 million investment, and Wuxi Diesel Engine Works the balance.

The joint venture company, Wuxi Da-Hao Power Company, is building an assembly plant with the capacity of producing 5000 engines a year. The plant is due to start production in January 2000.

In addition to engine assembly, the agreement includes transfer of technology from Volvo Penta, including training in logistics, quality control, purchasing routines, design, and production technology.

Initially, the engines and components will be predominantly delivered to Wuxi from Sweden. Within 5 years, it is planned that domestically produced components will be used.