AB Volvo reportedly plans to group all of its independent operations in India “under one umbrella”.
It operates in the country through VE Commercials, a joint venture with Eicher, and several other independent legal entities including Volvo Buses, Volvo Construction Equipment, Volvo Financial Services, Volvo Penta, Volvo Trucks and captive software entity, Volvo-IT.
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A senior Volvo Buses executive told the Hindu Business Line there were several proposals under consideration and the plan to bring all the entities under one umbrella was one. No more details were disclosed.
Citing sources, the paper said AB Volvo in Sweden wants to combine the operations as much as possible because it would lower costs by sharing resources such as personnel, material and capacities.
The sources said top management is keen on consolidation but investment issues and poor performance by some units could hinder the plan. They said some units do not perform well because of the cyclical nature of their businesses while others need more investment to do better.
Volvo Buses has performed well while Volvo Trucks has been hit by the economic downturn in India.
Volvo Buses managing director VRV Sriprasad told Business Line the company will source engines from the plant in Indore, Madhya Pradesh, within two years, lowering vehicle cost.
Indore exports Euro 6 engines while the Indian arm of Volvo Buses will get Euro 4 and 5 engines meeting current local emission standards.
Sriprasad earlier told reporters the company had sold over 5,000 buses during the last 13 years in India and expects to perform better this fiscal year 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.”
Referring to a recent spate of bus accidents in India, he said Volvo buses made there are among the safest in the country.
“[The accidents have] not impacted our sales in the country. We have shared all the details with the investigating agencies and have nothing to hide.”
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