Volvo to bring all India units under one umbrella

Swedish multinational AB Volvo plans to bring all its independent entities in India under one umbrella.

Volvo has a large presence in the country through VE Commercials, a joint venture with Eicher, and several other independent legal entities. These include Volvo Buses, Volvo Construction Equipment, Volvo Financial Services, Volvo Penta, Volvo Trucks and the captive software entity, Volvo-IT.

A senior executive with Volvo Buses told

Business Line that there are several proposals under consideration and the plan to bring all the entities under one umbrella is one of them. He did not share more details.

According to sources, the parent company in Sweden wants to go ahead with the plan because it will bring in the much needed synergies among these legal entities and lead to lower costs as all of them can share resources such as manpower, material and capacities.

While the top management is keen on bringing all these companies together, there are certain issues like investments and poor performance by some of them, which hold back the implementation of the plan, sources said. They said certain entities do not perform well because of the cyclical nature of their businesses, while the others need more investments to do better.

For example, Volvo Buses is one of the companies that have performed well so far, while Volvo Trucks has been hit by the economic downturn in India.

Volvo Buses managing director VRV Sriprasad told Business Line that within the next two years, the company will start sourcing engines from the plant in Indore, Madhya Pradesh, which will bring down the cost of the vehicle. At present, the inter-city buses cost between ₹80 lakh and ₹1.2 crore, while city buses cost about ₹80 lakh. At present, the Indore plant exports Euro 6 engines, while the Indian arm of Volvo Buses will get Euro 4 and 5 engines as per the emission standards prevailing in the country.

Earlier, speaking at a news conference, Sriprasad said the company has sold over 5,000 buses during the last 13 years in India and expects to perform better during this fiscal as well. “The state transport undertakings are seeing the benefit of having Volvo buses in their fleet because the realisation from them is much higher than other brands.”

The buses manufactured in India are among the safest in the country, he said. “Recent spate of accidents has not impacted our sales in the country. We have shared all the details with the investigating agencies and have nothing to hide.”