Volvo, the world's second-largest truckmaker, announced it has signed a letter of intent to divest a plant in Spain for structural reasons.
Terms of the transaction were not disclosed.
The Swedish group intends to divest the crankshaft plant in Leganes, Spain to mechanical integrator MAPE, which is already a supplier to Volvo.
The plant has 150 employees.
Currently, part of the plant's production capacity is used to manufacture crankshafts for the group's automotive medium-duty engine platform. This production will be relocated in conjunction with the switch to a new generation of engines in 2013, the company said.
MAPE specializes in crankshafts, balance shafts, camshafts and connecting rods, with operations in Italy, Sweden and the U.S.
"This is a very good opportunity for us to expand our business in the heavy-duty engine segment," says Giuseppe Pederzini, Chairman of the Board of MAPE. "The available capacity will allow us to add additional customers that are considering outsourcing crankshafts."
The group does not expect the transaction to have any material impact on its earnings or financial position.
Earlier this week, the company said it would close its Swedish facility in 2013 due to slow demand for buses and disadvantageous pricing. The company also said it has finalized the sale of Volvo Aero to the global engineering company, GKN.
Last month, Volvo said it will invest 783 million Swedish Krona ($118.4 million) in Russia to strengthen its presence in the premium heavy trucks segment in the region.