The decision to sell the Hallsberg cylinder production is in line with Volvo CE's overall strategy of focusing on cab manufacture at this facility, it said.
Hallsberg is the company’s global competence centre for cab manufacture and supplies most of Volvo CE's other European factories.
Competence development and future investments in Hallsberg will now be concentrated on cab operations.
Cylinder production in Hallsberg is expected to stop by the end of 2012. Meanwhile, the production will gradually be transferred to Pacoma GmbH, Hydraulic Technology, Germany.
Volvo CE said that it already has a well-established co-operative partnership with Pacoma which will be further reinforced by the current agreement.
Volvo Construction Equipment, part of the Volvo Group, develops, manufactures and markets equipment for construction and related industries including wheel loaders, hydraulic excavators, articulated haulers and material handling equipment.