Eicher Motors Bolsters Commercial Vehicle Future with Major Volvo Transmission Deal

VE Commercial Vehicles Limited (VECV), the joint venture between Eicher Motors and Sweden's Volvo Group, announced a significant ₹544 crore investment to manufacture automated manual transmissions in India. This investment marks a strategic expansion in the commercial vehicle sector and reinforces the company's 'Make in India' credentials.

VECV revealed plans to establish a greenfield manufacturing facility at Vikram Udyogpuri Integrated Industrial Township near Ujjain, Madhya Pradesh. The facility will produce Volvo Group's industry-leading 12-speed Automated Manual Transmission (AMT) technology. The investment, equivalent to approximately 576 million Swedish Krona, represents another milestone in the 18-year-old partnership between Volvo Group and Eicher Motors.

The manufacturing arrangement operates under a technology licence agreement between VECV and Volvo Trucks Corporation, Sweden. Approximately 90% of the produced transmissions are destined for export to Volvo Group's global operations. The remaining 10% will be integrated into Eicher Heavy Duty trucks manufactured by VECV, strengthening the company's domestic commercial vehicle offerings.

The facility will commence with an initial annual production capacity of 40,000 units, with gradual scaling aligned to Volvo Group's global quality standards and processes. This positions VECV as a strategic manufacturing hub serving not only the Indian market but also select Asia-Oceania regions.

The 12-speed AMT technology offers proven advantages in commercial vehicle operations, including reduced driver fatigue, improved fuel economy, enhanced productivity, and increased vehicle uptime during demanding operations. These improvements address critical challenges in India's evolving commercial transportation sector, where operational efficiency directly impacts profitability.

Sofia Frandberg, Chairperson of VECV and Senior Leader at Volvo Group, emphasised the strategic value of the investment, noting it leverages technical and industrial capabilities developed over 18 years of partnership. The project builds upon VECV's established role as the global manufacturing hub for Volvo Group's 5-litre and 8-litre engines since 2013.

The initiative aligns with the Government of India's Make in India vision whilst strengthening VECV's position in the commercial vehicle market. Vinod Aggarwal, Managing Director and CEO of VECV, highlighted that the investment responds to the Indian commercial vehicle industry's shift towards higher capacity vehicles.

Siddhartha Lal, Chairman of Eicher Motors Limited, described the investment as marking "another significant step towards our vision of becoming a leading CV player in India and other emerging markets by driving modernisation in commercial transportation."

Following the announcement on 8 October 2025, Eicher Motors shares experienced mixed trading. The stock closed at ₹6,902.50 on 8 October, representing a decline of 0.78% from the previous day's close of ₹6,957. Trading volumes reached 476,286 shares, indicating heightened investor activity following the announcement. 

Prior to the announcement, the stock had shown positive momentum, gaining 1.12% on 7 October to close at ₹6,957. The company's market capitalisation stands at approximately ₹1,89,320 crores, with the stock trading within its 52-week range of ₹4,508.75 to ₹7,122.50. 

The AMT manufacturing agreement strengthens VECV's position within Volvo Group's global supply chain whilst expanding Eicher Motors' technological capabilities in advanced transmission systems.