Volkswagen AG set plans to list its heavy-truck division Traton SE in Frankfurt and Stockholm, moving forward with one of the year’s largest European public offerings despite a wobbly stock market and a swirling trade war between China and the U.S.

“The IPO will lay the foundation for Traton’s further growth by providing us with enhanced entrepreneurial flexibility and access to capital markets,” VW truck chief Andreas Renschler said in a statement late Monday. The company reaffirmed it expects the IPO to be completed “before the summer break” in August, depending on market conditions.

Traton, which sells MAN and Scania AB vehicles, could fetch an equity valuation of about 16 billion euros ($18 billion), according to Jefferies estimates.

VW executives initially considered selling as much as a 25% stake, though the amount might be as low as 10%-15% depending on demand, according to people familiar with the matter who asked not to be named. Prime Standard listing rules in Frankfurt require a free float of at least 10%. VW reiterated it will retain a majority stake.

Volkswagen surprised investors last month, reviving its effort to float Traton just weeks after shelving the plan in March. The sale will mark a litmus test not only for IPO demand in a European stock market that turned in its worst month in 3 1/2 years during May but also for the ability of VW’s management to push through deep structural change.

Chief Executive Officer Herbert Diess, who took over the job a little more than a year ago, is seeking to shake up convoluted processes that often bog down decision-making across the industrial conglomerate. He wants to give the units spanning some 300 different vehicles, 122 factories and 665,000 employees worldwide more flexibility to improve efficiency at the world’s largest automaker.

Volkswagen—whose automotive brands range from the namesake VW to Audi, Porsche and Lamborghini and the SEAT and Skoda budget brands—gained 1.4% to 143.55 euros at 9:25 a.m. in Frankfurt.

Others including Daimler AG and Renault SA gained after RBC analyst Joseph Spak started coverage on European automakers with VW among its top names. He said in a research note Tuesday that the company should command higher multiples because of the earnings power of the truck unit and Porsche. Investor fears over electrification are overblown and a demand slowdown in China will be temporary, Spak said, though a full-blown trade war between the U.S. and China could hurt valuations.

While the tensions between the two biggest automotive markets has dented car sales, so far truck demand has been relatively stable as fewer vehicles are exported between different regions. That could change as tariff threats, investigations and other tit-for-tat measures between the U.S. and China start to sap economic growth rates. There’s also Brexit and side scuffles over trade between the U.S. and Europe, with cars at the center, and between the U.S. and Mexico.

A successful IPO would generate funds for Traton’s expansion outside of its main European market, while giving a boost to Diess’s broader strategy overhaul—a push that appeared in doubt with the initial decision in March to put plans for a listing on hold.

Traton plots a global expansion to challenge market leaders Daimler AG and Volvo AB in markets such as North America and China, including potentially boosting its 16.8% stake in U.S. peer Navistar International Corp. Besides Swedish heavy-truck specialist Scania and Germany’s MAN, the unit includes a smaller operation in Brazil that sells VW-branded commercial vehicles for emerging markets.

VW said last month it also would also explore a sale, joint venture or partnership for its MAN Energy Solutions and Renk AG divisions, which have no overlaps with the main passenger-car operations.

The Stoxx 600 European index is up about 9% this year, even after suffering a 5.7% decline in May as tension escalated between the U.S. and China. The automotive subsector is up 4.6%.

Fundraising from IPOs on European exchanges has fallen 58% this year to $9.2 billion, the slowest pace for any comparable period since 2013, according to data compiled by Bloomberg.

Finablr, Abu Dhabi billionaire Bavaguthu Raghuram Shetty’s currency-exchange firm, slashed its London IPO price last month after struggling to find investors. The year’s biggest offering, from Italian payment processor Nexi SpA, raised $2.3 billion after pricing below the midpoint of an initial range, the data show.

Traton will help VW create value for its shareholders, VW Chief Financial Officer Frank Witter said in the statement. “It was the right decision to strengthen the independence of our commercial vehicles business,” he said.

Citigroup, Deutsche Bank, Goldman Sachs International and J.P. Morgan are the deal’s joint coordinators. BofA Merrill Lynch, Barclays, BNP Paribas, SEB and UniCredit Bank AG are the Bookrunners and Commerzbank, HSBC, Landesbank Baden-Württemberg and Société Générale have been appointed co-lead managers, VW said.