VE Commercial Vehicles (VECV), which is a truck and bus manufacturing company of Eicher Motors, has entered into an agreement with Volvo Bus India for taking over its bus division. The financial consideration for the transaction is at Rs. 100 crore. VECV is a joint venture between Volvo Truck Corporation and Eicher Motors.
The deal will result in the establishment of the new bus segment, comprising of Eicher and Volvo bus business. Further the transfer agreement with Volvo Group is for manufacturing, assembling, distributing and selling Volvo buses in India.
"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," VECV chairman Siddhartha Lal said.
Pursuant to the deal, the bus manufacturing unit at Hosakote, Bengaluru, and entire workforce of Volvo Bus India will be moved to VECV.
The top management of VECV clarifies further that no debt of Volvo Bus has been taken over by the company. The turnover of Volvo Bus as at the end of March 2020 came in at Rs. 276 crore, lower by 34% in comparison to FY19.
The deal will be concluded subject to fulfillment of conditions on the agreement and the transfer is likely to be made in two months time.