Industry Eye: Royal Enfield escapes Volvo link
Volvo injects £171 million into Enfield's parent company
Posted: 12 December 2007
by Roger Willis
THE INDIAN-PRODUCED Royal Enfield retro motorcycle brand has been excluded from a deal in which Volvo AB, the world's second-largest truck maker, has bought a 50 per cent stake in the truck operations of Eicher Motor, India's third-largest commercial vehicle manufacturer and also owner of the Royal Enfield brand.
Volvo has paid £171m for a 45.6 percent direct stake in the joint venture, which will take over Eicher's truck, bus and components business, and the Swedish company is also acquiring 8.1 per cent of the Eicher parent group, giving it 50 per cent of the partnership. This will have about 2300 staff with production concentrated at Eicher's main plant at Pithampur in central India.
Eicher's Royal Enfield motorcycle-manufacturing division at Chennai in southern India will remain separate from this tie-up and there is some speculation that it will be put up for sale.
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