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New Delhi: The Cabinet Committee on Economic Affairs (CCEA) Thursday approved a foreign direct investment (FDI) of $275 million (Rs.10.43 billion) by Swedish auto major AB Volvo in a joint venture with Indian auto maker Eicher Motors.
Volvo will pick up a 45.6 percent stake (4,560,000 equity shares) in the paid-up equity of the joint venture company, Eicher Motors India Ltd (EMIL). Eicher Motors Ltd (EML) will hold the balance 54.4 percent equity and act as an operating-cum-holding company, a government spokesman said.
The $275 million investment will be in cash, he added.
The new joint venture will carry on the Indian company's commercial vehicle business, along with related components and design service business, which Eicher will transfer to EMIL.
Volvo on its part is demerging the sales and distribution network of Volvo India Pvt. Ltd and will transfer it to the new joint venture EMIL, the spokesman said.
The approval will be subject to compliance with Reserve Bank of India and Securities and Exchange Board of India guidelines, as well as foreign investment norms and the court's approval of the demerger of Volvo India's distribution business, he added.
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Reader’s comments
Comment 1: It would augur well for the logistic companies by bringging on board the very best in technology. Why in India , we still have barriers for FDI, after all Volvo would not bring on board tainted money...
In my opinion, after Merc Actros, Volvo makes the best heavy commercial vehicle, much better than scania or any other jap tin toys.
In long run , maybe Volvo is able to offer the sedan to Indina markets and they are reputed to make the safest vehicle in the world & I have my opinion on it that everyone emulates Volvo , including BMW,Merc etc, when it comes to safety. Indians are not yet used to that kind of features, except in cream de la cream segments, but Volvo can really help change the lansacpe of auto industry form the tin toys genre that we have as of now from the japs.
Besides it is also a testimony for the indian manufacturing companies capabilities.
Let the FDI come freely and it would only augur well for the country by boosting the multiplier effects.
Posted by : Rajeev Pandey - Friday, July 25, 2008
In my opinion, after Merc Actros, Volvo makes the best heavy commercial vehicle, much better than scania or any other jap tin toys.
In long run , maybe Volvo is able to offer the sedan to Indina markets and they are reputed to make the safest vehicle in the world & I have my opinion on it that everyone emulates Volvo , including BMW,Merc etc, when it comes to safety. Indians are not yet used to that kind of features, except in cream de la cream segments, but Volvo can really help change the lansacpe of auto industry form the tin toys genre that we have as of now from the japs.
Besides it is also a testimony for the indian manufacturing companies capabilities.
Let the FDI come freely and it would only augur well for the country by boosting the multiplier effects.
Posted by : Rajeev Pandey - Friday, July 25, 2008
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