Eicher Motors and Volvo JV to acquire Volvo’s India bus business …

A new bus division will be formed at VECV that will house both the Eicher and Volvo bus businesses. It will be headed by Volvo Bus Corporation’s Akash Passey, who will move to VECV.



Mumbai: Sweden’s Volvo group will be transferring its bus division in India to VE Commercial Vehicles (VECV), its joint venture company with Eicher Motors NSE -1.28 % for a cash payment of Rs 100.5 crore.

A new bus division will be formed at VECV that will house both the Eicher and Volvo bus businesses. It will be headed by Volvo Bus Corporation’s Akash Passey, who will move to VECV. The deal is expected to conclude in the next two months.

The bus manufacturing plant of Volvo Volvo at Hoskote in Karnataka and its 500 employees would be transferred to VECV. The companies said that the deal will benefit both the companies, with Volvo getting access to VECV’s wide domestic sourcing as well as after sales network. Eicher will meanwhile get access to Volvo’s technology and global sales reach.

“Volvo is a very, very well-known brand in India ans had become a generic name. Everyone calls a luxurious bus a Volvo bus,” said Vinod Aggarwal, managing director at VECV.

Volvo, which is now the only player in the luxury bus segment, has been become a generic name. Everyone calls a luxurious bus a Volvo bus,” said Vinod Aggarwal, managing director at VECV.
Volvo, which is now the only player in the luxury bus segment, has been struggling for some time to increase the market size. With the business being integrated with VECV, it will benefit from better cost rationalisation.

The two companies plan to enter newer market segments, like mid-premium buses. Aggarwal told ET that presently there is a gap in the market between mass-market heavy-duty buses costing around Rs 30-35 lakh and luxury buses costing Rs 1 crore.

The jointly-developed products could also be exported from India to Volvo’s other markets in the future.




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