Volvo Eicher Commercial Vehicles Ltd (VECV), a subsidiary of Eicher Motors Ltd, acquired Volvo Bus India, a division of Volvo Group India Pvt. Ltd, for ₹100.5 crore, the two companies announced on Thursday.
The company was engaged in the business of production and sale of buses and coaches in India.
“The transaction comprises of the proposed acquisition of the bus business as a going concern on slump sale basis,” Eicher said in a disclosure made to the stock exchange.
As a result of the transaction, Volvo’s bus manufacturing facility at Hoskote, Bengaluru, and about 500 employees will be transferred to VECV.
Vinod Aggarwal, managing director and CEO at VECV, said that after the transaction is made, VECV plans to consolidate its bus business under an all-new bus division that will be created within VECV. Akash Passey, who currently is the senior vice-president at Volvo Bus Corp, will head the said division.
According to Aggarwal, while Eicher is an established player in the production and sale of mass-market buses, absorption of Volvo Buses offers access to technology to make low-floor and multi-axle coaches along with the premium brand.
Eicher, which is already strong in the school and staff segments, now plans to foray into the inter-city bus segment with the acquisition, while growing in the heavy-duty bus category. The said move will benefit Eicher to take on its existing rivals such as Ashok Leyland Ltd and Tata Motors Ltd in the bus segment.
“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,” said Håkan Agnevall, president of Volvo Bus Corp.
