Volvo AB, the world's second-largest truckmaker, will create a joint venture with Indian vehicle manufacturer Eicher Motors Limited as the Swedish company vies for a larger share of the fourth-largest truck market.
Gothenburg, Sweden-based Volvo will contribute $350 million to the venture, of which $275 million will be in cash, the company said in a statement today. As a result, Volvo will hold 45.6 percent of the venture. The company also plans to buy 8.1 percent of Eicher, giving Volvo 50 percent of the partnership.
``It is strategically highly important for the Volvo Group to have a presence and to offer Indian customers products that are specially adapted to their market and needs,'' Volvo Chief Executive Officer Leif Johansson said in the statement.
The partnership will improve Volvo's access to the Indian truck market, where Eicher controls more than a quarter of light and medium-heavy truck sales. MAN AG, Nissan Motor Co. and Navistar International Corp. also formed joint ventures in India in the past year, increasing competition for local truckmakers.
source:bloomberg.com
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