Today’s market is full of competition, with one firm trying to usurp another. Competition brings out the best in anybody and it has direct implications in all kind of markets. The partnership talks between two automobile majors, Volvo and Ashok Leyland is only a testimony for the aforesaid.
Volvo has been India for the past eight years, doing decent business by selling buses and trucks to both government and private parties. In Volvo’s perspective, entering into the medium commercial vehicle market is very crucial for its expansion. The medium commercial vehicle business has not been in its ambit as far as the Indian market is concerned and this partnership would suffice its needs to gain a stronghold. Volvo was forced to payback a sum of $2.2 bn due to recent pressure from its shareholders and this has made it inquisitive in making acquisitions and adding to its repertoire. So this alliance would and could prove to be beneficial to the Swedish giant.
On the other hand, Ashok Leyland would consider this partnership as a filling of gap caused due to the quitting of IVECO Fiat, the Italian player. With IVECO Fiat- the heavy truck arm of Italian automobile giant, having joined hands with rivals, Tata Motors after selling its 15% stake in LRLH, the Hindujas are all set to enter into a partnership with Volvo. LRLH, the holdings firm of the Hindujas family who now hold 51% of Ashok Leyland, requires technology for its own betterment and it would expect the much needed technology exchange would happen in this partnership. With global conglomerates like Daimler Chrysler, International Truck & Engine Corporation and MAN Nutzfarhzeuge vying the Indian Market and Tata Motors planning to introduce world truck range in 2008 Ashok Leyland has to try every trick to be competitive enough in the market.
Though the fiscal dealings haven’t been disclosed yet, this partnership would certainly be fruitful to both the parties. The salubrious competition would also bring the best out of the people, as said before and when two firms, best in their business, tie up, it is needless to say it would benefit the people and the nation at large.
Volvo has been India for the past eight years, doing decent business by selling buses and trucks to both government and private parties. In Volvo’s perspective, entering into the medium commercial vehicle market is very crucial for its expansion. The medium commercial vehicle business has not been in its ambit as far as the Indian market is concerned and this partnership would suffice its needs to gain a stronghold. Volvo was forced to payback a sum of $2.2 bn due to recent pressure from its shareholders and this has made it inquisitive in making acquisitions and adding to its repertoire. So this alliance would and could prove to be beneficial to the Swedish giant.
On the other hand, Ashok Leyland would consider this partnership as a filling of gap caused due to the quitting of IVECO Fiat, the Italian player. With IVECO Fiat- the heavy truck arm of Italian automobile giant, having joined hands with rivals, Tata Motors after selling its 15% stake in LRLH, the Hindujas are all set to enter into a partnership with Volvo. LRLH, the holdings firm of the Hindujas family who now hold 51% of Ashok Leyland, requires technology for its own betterment and it would expect the much needed technology exchange would happen in this partnership. With global conglomerates like Daimler Chrysler, International Truck & Engine Corporation and MAN Nutzfarhzeuge vying the Indian Market and Tata Motors planning to introduce world truck range in 2008 Ashok Leyland has to try every trick to be competitive enough in the market.
Though the fiscal dealings haven’t been disclosed yet, this partnership would certainly be fruitful to both the parties. The salubrious competition would also bring the best out of the people, as said before and when two firms, best in their business, tie up, it is needless to say it would benefit the people and the nation at large.
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