HCLTech, Infosys Compete for $1 Billion Volvo Deal

HCLTech and Infosys are in a fierce battle for a $1 billion IT contract with Swedish truck maker Volvo Group, which is up for renewal, according to a report. Both companies had their leadership teams in Gothenburg, Sweden, last week for the final round of negotiations.

For HCLTech, the negotiations are being led by Ashish Kumar Gupta, head for EMEA and corporate VP, who played a key role in securing the original deal in 2016. The agreement at the time covered the transformation of Volvo's IT infrastructure, including over 3,500 applications, more than 20 data centres, 11,000 servers, and 15,000 network devices.

In addition to this, HCLTech had also set up an automotive centre of excellence in Gothenburg, providing expertise in manufacturing IT, R&D, digital solutions, and IoT. “As a policy, we do not comment on the specifics of client agreements,” HCLTech said.

In 2016, HCLTech acquired Volvo Group’s external IT operations for $138 million, a deal that was expected to generate $1 billion in revenue over five years. The acquisition, coupled with an outsourcing contract, was estimated to contribute around $2 billion to HCLTech’s earnings over the same period.

Winning this renewal would be a crucial boost for the successful bidder, as Tier-I Indian IT firms have seen a dry spell of mega deals for at least a quarter.

In other news, Infosys is also establishing a global capability centre (GCC) in India for Lufthansa as part of a renewed IT contract valued at nearly $300 million.