Nissan sells rest of truck division stake to Volvo

TOKYO (AFP) - Nissan Motor Co. has said that it was cutting its capital ties with Nissan Diesel Motor, selling its remaining six percent stake in the revitalised truck maker to Sweden's Volvo AB.

Volvo said separately that it was paying Nissan about 500 million kronor (69 million dollars) so as to boost its share in the Japanese truck maker from 13 percent to 19 percent.

The Swedish group said it plans to gradually raise its stake to 46.5 percent by converting preference shares that it has acquired from Nissan Motor and Japanese banks at a cost of 3.5 billion kronor (483 million dollars). "We foresee favorable possibilities for coordination and economies of scale in the development of products, particularly in the medium-heavy range, with regard to engines and drivelines, as well as within purchasing, distribution and sales," said Volvo deputy chief executive Jorma Halonen. "It was already evident earlier that Nissan Diesel complements the Volvo

Group with regard to products as well as geographical coverage," Halonen added. The share sale comes roughly six months after Volvo bought a 13 percent stake in Nissan Diesel Motor from Nissan, Japan's number two automaker, and took an option to buy the remainder of its shares within four years. Nissan chief executive Carlos Ghosn said the move was "consistent with Nissan's stated strategy to focus on the profitable growth of our core passenger vehicle and light commercial vehicle businesses. "We firmly believe that Volvo is the best partner for Nissan Diesel.

During the past four years, Nissan Diesel has seen a turnaround in its business performance to become a valuable company, a fact that has been acknowledged by the management of Volvo through this process," Ghosn said in a statement. Nissan said its business partnership with Nissan Diesel would be unaffected and the two companies would continue to work together on contract production and joint development of light commercial vehicles and engines.

Volvo also bought French automaker Renault's heavy vehicle division in 2001. Renault controls 44 percent of Nissan and 20 percent of Volvo. Ghosn, who is credited with rescuing Nissan from near bankruptcy after taking over in 1999, became chief executive officer of Renault in April while remaining Nissan's president and chief executive.