The Swedish car maker, Volvo, announced today that it has finalised its joint venture deal with Eicher Motors after getting an approval nod from regulatory authorities in India. Volvo Group has already paid Rs. 13.2 billion for its portion of Joint venture.

The letter of intent had been signed in December. The joint venture included Eicher Motors' truck and bus operations and Volvo's Indian truck sales operations. The Joint venture has formed VE Commercial Vehicles Limited (VECV) whereby EML shall hold 54.4 per cent equity and Volvo would have 45.6 percent stakes. The JV shall have an equity value of $768 million where EML shall invest $418 million and Volvo shall contribute $350 million.

Eicher Motors Ltd. shall transfer its commercial vehicle business along with its related components and engineering design services businesses to the joint venture company. Operations of the joint venture company shall be effective from July 1, 2008. The joint venture company shall also contain Volvo's Indian truck sales operations and the truck and bus service operations. Eicher manufacture is commercial vehicles from its Pitampur plant in Madhya Pradesh and Volvo shall roll out its trucks from its Bangalore facility.