Swedish truck major Volvo put forward a proposal before the Cabinet Committee on Economic Affairs (CCEA) for investing $275 million in its joint venture with India’s commercial vehicle manufacturer Eicher Motors and it finally got approved on Thursday, July 25. An official statement issued in this regard read, ‘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.’

The statement also underscored that Eicher Motors will hold the balance 54.4 per cent equity of the company and will act as an operating-cum-holding company. Volvo’s foreign direct investment (FDI) proposal involving $30 million investment in the induction of foreign equity up to 8.1 per cent by way of acquisition of shares in EMIL had already received approval from the Finance Ministry.

It has been planned that the JV Company Eicher Motors India Limited will manufacture and market independent Eicher and Volvo branded trucks. While Eicher will concentrate on making 5 to 50 tonne trucks and the Volvo Company will focus on heavy duty trucks. This collaboration will also seek to export Eicher’s commercial vehicles in markets where Volvo has a strong hold as this will complement the Swedish commercial vehicle major’s heavy truck portfolio.