Volvo decides to sell its governmental sales unit

Volvo, the Swedish automaker famous for its luxury line of buses and trucks, has announced to sell its governmental sales unit. The commercial vehicle manufacturer reported that it has already initiated the process for the same. The decision of selling the unit was taken after a strategic review of the business.

Volvo’s governmental sales unit had contributed only 1.5 per cent of the total sales registered by the Swedish automaker in 2015. Volvo made sales totalling approximately $35 billion in 2015.

Volvo CFO Jan Gurander, in a statement, said, “There are great opportunities to grow the business even further, however, we believe that a new owner may be better placed to take the business to the next level. Consequently, we intend to start preparations to divest the business."

The governmental sales unit in discussion here comprises approximately 1300 employees who work for Volvo from its France location. The unit is majorly responsible for developing and designing vehicles for different governments in the world. It is also important to note here that the same unit also designs vehicles for different defence forces.

Volvo further explained that the commencement of the divestment process was subject to the finalizing of mandatory consultations that took place with staff representative bodies.

The luxury buses manufacturer produces trucks in collaboration with Eicher in India (VECV). A lot of state governments in the country have included luxury Volvo buses as a part of their transportation fleet.

Source: TrucksDekho.com