November 22, 2008

Eicher Motors inks JV with Volvo

It is reported that Eicher Motors Limited and Volvo have formalized their JV, in which Volvo will pump in INR 1082 crore. Eicher Motors will hold 54.4% stake in the JV while, Volvo will hold the rest 45.6%. Volvo will have an economic interest of 50% in the JV.

Mr Siddhartha Lal MD & CEO of Eicher Motors said that "The commercial vehicles business along with related components and design services of Eicher Motors will be transferred to the JV, which will be an unlisted subsidiary of Eicher Motors, on a slump basis at a value of INR 202.2 crore." He added that as part of the JV agreement, Volvo will transfer its Indian truck distribution and service network business to the JV.

Mr Par Ostberg executive management member of Volvo Group and also chairman of Volvo Trucks Asia said that the move is a part of its plans to tap the fast growing commercial vehicles market in Asia, and India in particular. He added that "India is the fourth largest market for heavy trucks in the world and with the country investing heavily on improving infrastructure, there is a big opportunity for us."

He said that all Volvo Group truck projects in India would be routed through the JV and Volvo may also look at entering the commercial vehicles financing business in which it is successful globally.