VE Commercial Vehicles to buy Volvo Bus India for Rs 100 crore

VE Commercial Vehicles Limited (VECV), a joint venture between Volvo Truck Corporation and Eicher Motors, on Thursday announced the signing of an agreement with Volvo Group to acquire Volvo Bus India for Rs 100 crore.

According to the agreement, Swedish commercial vehicle maker Volvo Group will transfer the bus manufacturing plant at Hoskote near Bengaluru and its 500 employees to VECV.

Volvo Bus India is a division of Volvo Group India Private Limited (VGIPL). With this, VECV will manufacture, distribute and sell Volvo buses in India.

"This is a momentous occasion. With the integration of Volvo Buses India into VECV, we aim to shape the future of the Indian bus industry by offering the widest range of transport solutions to our customers," Siddhartha Lal, Chairman, VECV said on Thursday.

The transaction is expected to be completed in two months. Post the completion of the transaction, VECV and VBI will consolidate their bus businesses into a newly formed bus division within VECV. This division will offer Volvo and Eicher branded buses and will maximise synergies to capitalise on market opportunities. This strategy will also 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 company said in a statement.

"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”, said Håkan Agnevall, President of Volvo Bus Corporation.

Akash Passey, Senior Vice President, Volvo Bus Corporation will join as President of the newly formed VECB Bus Division. He will repatriate to India for this role and report to Vinod Aggarwal, MD & CEO, VECV.

"With this integration, VECV will be able to leverage synergies in the areas of product development, purchasing and manufacturing with access to Volvo Group’s world-class technology in buses," Vinod Aggarwal, Managing Director & CEO, VECV said.

The company will be entering into newer market segments such as mid-premium buses, Aggarwal said.

Currently, over 7,000 Volvo buses operate on Indian roads. Around 1,800 city buses are plying on roads in 35 Indian cities.