Dec 10, 2007, 9:30 GMT
Stockholm - Swedish heavy vehicle maker Volvo on Monday said it plans a joint venture with Eicher Motors of India.
The two groups would form a joint-venture company that will include Eicher Motors' truck and bus operations and the Volvo Group's Indian truck sales operations, a statement from Volvo said.
Volvo Chief Executive Leif Johansson said the deal was important, saying that the 'Indian market for heavy trucks is the fourth largest in the world.'
Eicher Motors is India's third-largest truck maker and has a 27- per-cent share of the light truck market.
According to the letter of intent, Eicher Motors is to transfer its entire truck and bus operations as well as the component business and engineering services to the new joint-venture company. Motorcycle production would not be included.
Production would be located mainly in Eicher Motors' current plant in Pithampur, central India.
Eicher Motors Chief Executive Siddhartha Lal said the group hoped to benefit from Volvo's brand and 'support in products, technology and financial strength.'
The deal was slated to be concluded by mid-2008, but hinged on approval from competition authorities and Eicher Motors shareholders.
The Volvo group does not include the Ford-owned car division.
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