Indian commercial vehicles manufacturing company VECV of Eicher Motors group has acquired Volvo Bus India for ₹.100 Crore.
VE Commercial Vehicles (VECV) company of Eicher Motors based in Hosakote, Bengaluru has signed an agreement with Volvo Bus India to acquire all its employees.
VECV is a joint venture between Volvo Truck Corporation and Eicher Motors. The agreement will facilitate the Eicher group to transfer the manufacturing, assembly, distribution and sale of the Volvo buses in India. This transaction will consist of Eicher and Volvo bus business.
VECV chairman Siddhartha Lal said
With this integration, we aim to shape the future of the Indian bus industry by offering the widest range of transport solutions to our customers. 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,
The transaction is expected to get completed in the next two months to come. Also, Lal has clarified the agreement covers only the take over of the Volvo bus India staff and not its debts.
During the Financial Year 2019-2020, Volvo Bus India’s turnover was dropped by 34% compared to its previous financial year 2018-2019. By the end of March 2020, the turnover stood at ₹.276 crores. However, the profitability figures of Volvo Bus India were not revealed despite enquiry.
The phase of acquisitions and selling has been common these days when the company’s performance starts to decline or the unfavourable conditions combat.
Volvo itself has acquired many manufacturing companies in the past. Volvo Buses India launched its first luxury bus in 2001 and just in a year it rolled out 100 buses in India. In 2005 it has rolled out 1000 buses in India. The growing demand has encouraged the company to set up a new plant in Bengaluru, India.