Volvo in talks with Hindujas for stake in Ashok Leyland
Our Corporate Bureau
29 August 2006
Swedish truck major Volvo is eyeing a stake in India's heavy vehicle leader Ashok Leyland to push up its sales in the country. The world's second-biggest truck maker, Volvo AB, is negotiating with Ashok Leyland's controlling stakeholders, Hindujas, reports quoting unnamed sources said.
The board of Volvo India is meeting to consider a proposal to buy a stake in Land Rover Leyland International Holdings (LRLIH), the UK based firm that holds a stake in Ashok Leyland for the Hinduja family, the report added.
LRLIH holds about 51 per cent stake in Ashok Leyland.
In July, the Hinduja family acquired Fiat's truck and bus division Iveco's 15 per cent stake in Ashok Leyland.
Volvo is planning a series of acquisitions to broaden its product range amidst shareholder pressure to hand back some of its 32 billion crown cash surplus. Its strong cash position has also made the company a likely takeover target.
Volvo AB saw its July deliveries of its various trucks increase three per cent to 129,654 in the seven-month period, up from 126,001 a year ago in January. The increase in deliveries was driven by a 13 per cent y-o-y increase in Europe and a similar increase in North America, Volvo said.