TOLEDO, Ohio — Dana Corporation has signed a formal letter of intent to form a 50/50 joint-venture company with one of China’s largest commercial-vehicle axle manufacturers, Dongfeng Motor Co., Ltd.

The planned joint venture means commercial-vehicle axles and components will be manufactured and assembled in China. In addition, there will be a research and technical center for manufacturing, materials, and systems development for medium- and heavy-duty axle products.

“When this joint venture is completed, we will have established the largest commercial-vehicle axle and component manufacturing company in China. With our technology and commercial-axle expertise, the joint-venture company will become a globally competitive supplier of medium and heavy axles for both Dongfeng Motor Co. and Dana," said Nick Cole, president of Dana’s Heavy Vehicle Technologies and Systems Group.

This transaction is another decisive step toward expansion of Dana into the growing Asian commercial vehicle market, Cole added. Partnering with Dong Feng will enable the joint venture to develop and manufacture components and systems at a much faster pace in order to better serve customers. We expect the global commercial-vehicle markets to grow significantly in the next few years especially in China, which has a growing transportation infrastructure.

“In the long run, complete systems and modules will be part of our joint goal as we accelerate into the future,” Cole said. “Both companies have the desire to expand this initial venture to include other Dong Feng and Dana components, as we will have the best of both worlds in technology and manufacturing.”

Completion of the joint venture is subject to board approval by both companies, customary governmental approvals, and execution of a definitive agreement.