Volvo has bought a 13% stake in Japanese truck maker Nissan Diesel for 1.5bn Swedish kronor ($195m; £111m).
Nissan Diesel expects 32.5bn yen of profits this year
The deal will make Volvo the biggest shareholder in Nissan Diesel and strengthen the Swedish firm's presence in East Asia.
Nissan Diesel is currently enjoying strong sales and for the current year expects to make pre-tax profits of 32.5bn yen ($280m; £160m).
The firms already have close ties as both are affiliated to Renault.
French firm Renault owns 44% of Nissan and about 20% of Volvo.
Renault sold its truck division to Volvo in 2001.
Volvo's investment in Nissan Diesel will give it increased access to the Chinese market where Nissan Diesel has an operational alliance with Dongfeng Motor Corporation.
"Nissan Diesel's and the Volvo Group's products and geographical coverage complement one another and this transaction opens possibilities for cooperation within production, sales and aftermarket," said Volvo chief executive Leif Johansson.
Volvo is the world's second biggest truck maker.
The carmaking company of the same name is now a separate business owned by US auto giant Ford.