The Hindu : Business : CCEA clears Volvo proposal

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CCEA clears Volvo proposal

Special Correspondent

Joint venture will market independent Eicher, Volvo trucks

Volvo to have
45.6 % stake in
the joint venture
Eicher will act as
an operating-cum-
holding company

NEW DELHI: The Cabinet Committee on Economic Affairs (CCEA) on Thursday approved the foreign direct investment (FDI) proposal of Swedish truck major Volvo to invest $275 million in its joint venture with commercial vehicle manufacturer Eicher Motors. “Aktiebolaget Volvo, Sweden will invest 45.6 per cent in the paid-up equity share capital in a new joint venture company, Eicher Motors India Limited (EMIL), incorporated by Eicher Motors Limited (Eicher) in March this year,” an official statement said.

Exports

“Eicher will be holding the balance 54.4 per cent equity of the company and will act as an operating-cum-holding company.

The Finance Ministry had already approved the FDI proposal of Volvo to invest $30 million for inducting foreign equity up to 8.1 per cent by way of acquisition of shares in EMIL. As per the plans, the joint venture company will manufacture and market independent Eicher and Volvo branded trucks with the former focussing on 5 to 50 tonne trucks and the latter on heavy duty trucks. It will also look at exporting Eicher brand of commercial vehicles in countries where Volvo has a distribution network to complement the Swedish commercial vehicle major’s heavy truck portfolio.

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