VE Commercial Vehicles (VECV), the truck and bus making company of Eicher Motors, has signed an agreement to buy the bus division of Volvo Bus India for Rs 100 crore. VECV is a joint venture between Volvo Truck Corporation and Eicher Motors.
The transaction will lead to a new bus division comprising Eicher and Volvo bus business. The transfer agreement with Volvo Group India is for manufacture, assembly, distribution and sale of the Volvo buses in India.
“With this integration, we aim to shape the future of the Indian bus industry by offering the widest range of transport solutions to our customers. This strategy will be extended to exports, wherein the new bus division will offer products and services that are complementary with Volvo Buses’ core product portfolio in select international markets,” VECV chairman Siddhartha Lal said.
The bus manufacturing facility at Hosakote, Bengaluru, and all employees of Volvo Bus India will be transferred to VECV.
VECV senior management clarified that no debt of Volvo has been taken over by VECV. Volvo Bus India’s turnover by end of March 2020 stood at Rs 276 crore, down 34 percent compared to the FY19. The executives declined to share the profitability position of Volvo Bus India.
The transaction will be completed once the agreement conditions are fulfilled and the transfer is expected to be closed in the next two months.
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