A joint venture between Eicher Motors Ltd and Sweden’s Volvo Group has agreed to acquire the latter’s domestic bus unit.
In a stock-exchange filing, Eicher said VE Commercial Vehicles will take over Volvo Bus India for Rs 100.5 crore ($13.4 million).
The unit – which will be acquired on a slump sale basis – is involved in the manufacture, assembly, distribution, and sale of Volvo buses in the country.
VE Commercial Vehicles – which began operations in 2008 – has a portfolio of products including the full range of Eicher-branded trucks and buses, powertrains, Eicher’s components businesses and the sale and distribution of Volvo trucks within India.
In a statement, Eicher Motors said the unit’s bus manufacturing facility in Karnataka’s Hoskote and all of Volvo Bus India’s employees will be transferred to VE Commercial Vehicles. The company said it expects the acquisition to be completed within one to two months.
Following this, VE Commercial Vehicles and Volvo Bus India will consolidate their bus operations into a new division within the purview of the former. This division will jointly market and sell Volvo and Eicher-branded buses and will offer products and services complementary with Volvo Buses’ core portfolio in select international markets.
As part of this overall move, Volvo Bus Corporation senior vice-president Akash Passey will take over as president of VE Commercial Vehicles’ bus division, and will report to Vinod Aggarwal, its managing director and chief executive officer.
“By consolidating the operations of Volvo Buses India into VE Commercial Vehicles, we aim to further develop our bus business and strengthen our position in the Indian bus market. The new bus division will offer a full range of modern buses covering customer needs for heavy, medium and light duty buses,” Volvo Bus Corporation president Håkan Agnevall said.