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Volvo Group and India’s Eicher Motors on Thursday announced a ₹100-crore deal under which their equal joint venture (JV) VE Commercial Vehicles (VECV) will buy the Swedish Group’s bus division in India and merge with itself.
Under an agreement signed by the partners, Volvo Buses India, which has been assembling and selling premium buses, will be merged with VECV, one of the successful JVs in the Indian auto sector. All operations of Volvo Buses, its bus assembly plant unit near Bengaluru, and employees will be part of VECV.
Bus division
“The VECV JV has been one of the successful ventures with more than 12 years of operations in India. The integration of Volvo Buses into VECV will make the VECV a large player in the Indian bus market with very wide offerings serving across segments. By combining the strengths such as technology expertise of Volvo Group and strong sales and service network of Eicher, we can now address the needs of the market in a much better way,” said Vinod Aggarwal, MD &CEO of VECV, during a virtual conference.
The integration deal will see VECV forming a separate bus division under which it will offer a range of buses under Eicher and Volvo brands. VECV has been a strong player in light and medium bus segment under the Eicher brand, while Volvo Buses has been a top player in the premium bus segment in India.
Appointment
Akash Passey, Senior Vice-President, Volvo Bus Corporation, will join as President of the newly formed VECV bus division. He will repatriate to India for this role and report to Vinod Aggarwal.
VECV is the third largest player in the Indian bus market after Ashok Leyland and Tata Motors. In FY20, the combined sales of VECV (3,697 units) and Volvo (337) units were a little over 4,000 and garnered a market share of about 10 per cent. Ashok Leyland was the leader in buses with 45 per cent share, followed by Tata Motors that had a 36 per cent share.
“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,” Håkan Agnevall, President of Volvo Bus Corporation, said in a note.
Passey stated that the idea is to strengthen the Eicher brand in the mass segment and grow the Volvo brand in the premium segment, he added.
Tapping export market
The integration deal is also expected to help boost 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 has been exporting Eicher brand of buses to many markets.
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