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Volvo Bus Buys Out Local Partner Azad Group In JV

By Sibi Sathyan

  • 07 Dec 2010

Volvo Bus India Private Limited, the Indian arm of Swedish bus maker Volvo Bus Corporation, has bought out the entire 30% stake of its joint venture partner, Bangalore-based Azad Group, at an undisclosed amount, to become a wholly-owned Volvo worldwide subsidiary.

The buyout was through mutual agreement with its joint venture partner keeping in mind its future plans to transform India into its `home market` and as an `industrial hub` for exports, sourcing and manufacturing, said a PTI report quoting Akash Passey, MD, Volvo Buses India.

Azad Coach, a manufacturer and exporter of world-class buses catering to India, Middle East, Africa and the SAARC nations, is a preferred brand partner for bus bodybuilding with leading chassis manufacturers including Ashok Leyland, Tata, Eicher and had entered in to a JV with Volvo in 2008.

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With a view to grow to a $1-billion company in the next five years, Volvo has announced its plans to double its investment in India to Rs 200 crore in next two years and will increase capacity at its Hoskote facility near Bangalore by 100%.

It also expects revenues to increase about 25% to over Rs 500 crore this calendar year, while the production will be scaled up five-fold to about 5,000 buses in five years.

About 25% of these buses will be exported. Currently, the company exports buses to some South Asian countries and will start exports to South Africa as well as West Asia soon.

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The company has over 75% market share i3W4er13n the luxury inter-city AC coach segment and over 50% market share in the AC diesel low-floor city bus segment.

The company will offer new services such as customer experience lounges, new integral production principles, a competence development centre and expand the paint shop. These services and the expansion of the production facility will lead to an increase of manpower of 30% in the next two years, Passey said. At present, Volvo Buses has about 1,000 employees.

Volvo Buses expects to grow between 15% and 20% overall next year and the soft services to give 50% of the revenue in 2013-14, he said.

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According to Rune Lundberg, the senior Vice-President for Volvo Bus Corporation and Chairman of the board of Volvo Business, India, the company wants India to become one of the three export hubs in the world. The other two are based out of South America and Europe.

The company has received its largest order in India to date, for 100 triple-axle Volvo 9400XL coaches from Karnataka-based Vijayanand Road Lines Logistics, VRL, in terms of order value. The buses will be delivered during 2011. Each of these buses costs between Rs 70 lakh and Rs 1 crore. Currently, there are about 3,500 Volvo buses operating in India.

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