Volvo CE Finalizes SDLG Divestment, Ending 19-Year Partnership with Chinese Machine Maker
Volvo Construction Equipment has officially ended its 19-year partnership with SDLG, noting it has finalized selling its 70 percent stake back to Lingong Group for SEK 8 billion. The move marks a major shift in Volvo CE’s China strategy, narrowing its focus to premium Volvo-branded equipment while giving SDLG full control of its own future. From Volvo CE’s website:
Melker Jernberg, Head of Volvo CE, says: “SDLG has served us well since 2006. However, with increasing competition, and the need to transform to new technologies as well as strengthen interaction with customers, we need to re-focus. China remains an important market for us, and we aim to capitalize on our opportunities by focusing on sustainable solutions in targeted segments. We also plan to leverage the excellent industrial system in China.”
Volvo and SDLG’s History
Volvo Construction Equipment (Volvo CE) entered the Chinese market in 2006 by acquiring a 70 percent stake in Shandong Lingong Construction Machinery Co (SDLG). The move gave Volvo CE access to China’s growing construction sector. SDLG gained global reach and technology support while Volvo CE expanded its footprint in the world’s largest equipment market.
On September 1, 2025, Volvo CE finalized the sale of its 70 percent ownership in SDLG. The shares were sold for SEK 8 billion (about 6 billion RMB) to a fund predominantly owned by Lingong Group (LGG), SDLG’s original minority shareholder. The divestment is expected to add around SEK 1 billion to Volvo CE’s operating income. Volvo CE plans to focus on premium Volvo-branded machines in China. It will continue using its Chinese operations as a production hub for domestic and export markets. The company will also expand its Jinan Technology Center, integrating it into its global R&D system.
A Recap of SDLG
Founded in 1972, SDLG has grown into a major Chinese equipment manufacturer. It produces more than 100 models across loaders, excavators and road machinery. The brand operates in over 130 countries and holds more than 290 patents. SDLG offers a variety of compact earthmoving machines from wheel loaders to mini excavators. Examples include:
- TV1100H compact track loader: 72-hp Yanmar engine, 4,550-lb operating weight and standard high-flow hydraulics. See video above for more info.
- ER620H mini excavator: 4,299-lb operating weight with 15-hp engine.
- ER636H mini excavator: Available with canopy or cab, weighs up to 8,700 lbs with 24-hp output.
- ER655H mini excavator: 13,000-lb operating weight powered by a 48-hp engine.
What Comes Next
The divestment allows Volvo CE to sharpen its strategy in China by focusing on sustainable premium solutions. For SDLG, full ownership under LGG could mean broader independence and faster product development in both domestic and export markets. Specifically, we’ll keep you updated on how this affects SDLG’s products in America.
Keith Gribbins is publisher of Compact Equipment.
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