New Delhi, May 26 (UNI) World's second largest truck manufacturer Volvo and commercial vehicle maker Eicher Motors Ltd (EML) today formalised their joint venture, in which the Swedish auto major will pump in Rs 1,082.1 crore.
While EML will hold 54.4 per cent stake in the JV, Volvo will hold the rest 45.6 per cent.
Volvo, by virtue of its separate investment in EML for 8.1 per cent stake, will have an economic interest of 50 per cent in the JV.
''The commercial vehicles business along with related components and design services of EML will be transferred to the JV company, which will be an unlisted subsidiary of EML, on a slump basis at a value of Rs 202.2 crore,'' EML Managing Director and CEO Siddhartha Lal told reporters here.
As part of the agreement, Volvo will transfer its Indian truck distribution and service network business to the JV, he added.
Commenting on the formalisation of the JV, Volvo Group Executive Management member and Volvo Trucks Asia Chairman Par Ostberg said the move is a part of the truck maker's plans to tap the fast growing commercial vehicles market in Asia, and India in particular.
''India is the fourth largest market for heavy trucks in the world and with the country investing heavily on improving infrastructure, there is a big opportunity for us,'' Mr Ostberg said.
He added that all Volvo Group truck projects in India would be routed through the JV and Volvo may also look at entering the commercial vehicles financing business in which it is successful globally.
UNI SR PDT RN2007