The Volvo Group has signed a final agreement with the Indian vehicle manufacturer Eicher Motors covering establishment of a new Indian joint-venture company. As announced previously, the joint venture, with the proposed name VE Commercial Vehicles Ltd. comprises Eicher Motors' entire truck and bus operations and the Volvo Group's Indian truck sales operations and service network for trucks and buses.
In accordance with the agreement, Eicher Motors transfers its entire truck and bus operations and its components business as well as operations within technical consulting services to VE Commercial Vehicles. Eicher Motors' production of motorcycles will not be included. As announced earlier, Volvo will have direct ownership of 45.6% of the joint-venture company. Volvo is also acquiring 8.1% of Eicher Motors Limited from the majority owner and consequently gains a direct and indirect ownership interest of 50% in VE Commercial Vehicles.
In addition, Volvo is transferring its Indian truck dealer network and its Indian truck and bus service network to the joint-venture company.
"This agreement provides a very solid platform for further growth on the Indian market for heavy trucks, which is the fourth largest in the world," says Pär Östberg, member of the Volvo Group Executive Management and responsible for the Group's Asian truck operations. "India is investing heavily in improving its infrastructure and together with Eicher we have highly favorable conditions to further strengthen our position on the Indian market."