VE Commercial Vehicles Limited (VECV), a subsidiary of Eicher Motors has entered into a Business Transfer Agreement with Volvo Group India for acquisition of the bus business of Volvo Group (VGIPL) for a cash consideration of Rs 100.5 crore.
The agreement entails manufacture, assembly, distribution and sale of Volvo buses in India, and other rights forming part of the business by VECV. The acquisition will be completed approximately one-two months from the date of execution of the Business Transfer Agreement.
Speaking on the announcement, Siddhartha Lal, chairman, VECV said, “This is a momentous occasion and testimony to a very strong relationship between Eicher Motors and Volvo Group. Over a period of time, the Volvo brand for buses in India has become synonymous with safety and comfort in both inter-city and intra-city public transportation, and we are extremely proud to have this iconic brand in our joint venture. With the integration of Volvo Buses India into VECV, we aim to shape the future of the Indian bus industry by offering the widest range of transport solutions to our customers.
After the completion of the transaction, VECV and VBI will consolidate their bus businesses into a newly formed bus division within VECV. This division will offer Volvo and Eicher branded buses, and will maximise synergies to capitalise on market opportunities. 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.
Hakan Agnevall, president of Volvo Bus Corporation said, “We are pleased with this development of Volvo Buses in India and see it as an opportunity to further build upon the successful JV company – VECV. By consolidating the operations of Volvo Buses India into VECV, 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.”
Vinod Aggarwal: "With this integration, VECV will be able to leverage synergies in the areas of product development, purchasing and manufacturing with access to Volvo Group’s world class technology in buses.”
Vinod Aggarwal, managing director and CEO, VECV added that, “VECV’s strong presence in the Indian bus market with Eicher-branded buses will be complemented by Volvo Buses’ prominent position in the premium bus segment. With this integration, VECV will be able to leverage synergies in the areas of product development, purchasing and manufacturing with access to Volvo Group’s world class technology in buses.”
“The Volvo Bus is a flag bearer of the Volvo Brand in India and we expect going forward this will be re-inforced even further by our JV partner – VE Commercial Vehicles,” added Kamal Bali, President & MD, VGIPL.
Akash Passey will join as President of the newly formed VECV Bus Division. He will repatriate to India for this role and report to Vinod Aggarwal, MD and CEO, VECV. Passey said, “Going forward, customers and partners can expect the same high level of customer care and world-class products from both Volvo and Eicher brands. The new division will also engage further in the dynamic Indian market driven by megatrends such as urbanisation, e-mobility and connectivity.”
This acquisition aims to expand VECV’s existing commercial vehicles business. The acquisition is in the same area as the main line of business of VECV, which is manufacture and sale of commercial vehicles and related services.
VECV is currently in the business of manufacturing and selling the Eicher branded trucks and buses and also distributes Volvo branded trucks and provides aftermarket services and distribution of spare parts for Volvo branded trucks and buses.