New Delhi, Dec 10 (UNI) Commercial vehicle manufacturer Eicher Motors Ltd today said it has signed a Letter of Intent (LoI) with Swedish truck maker AB Volvo to form a joint venture (JV) to manufacture buses and trucks.
Eicher Motors Ltd will hold 54.4 per cent in the 506 million dollar JV, while AB Volvo will own 45.6 per cent stake.
Eicher Motors will transfer its commercial vehicle business along with related components and design service businesses, a company statement said.
''With Volvo's strong brand recognition and financial strength and its support in products, technology and distribution we will be well positioned to further develop our brand and product offering in India,'' Eicher Motors' CEO and Managing Director Siddhartha Lal said.
The Swedish manufacturer will be investing a total of 350 million dollars in the joint venture, of which 275 million dollars will be in cash.
The venture will be jointly managed by Eicher Motors on equal shared-control basis and Volvo will acquire 8.1 per cent stake in Eicher Motors from its promoters.