Volvo for 30% India engines for export
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Volvo will also increase the annual capacity of the plant by 25 percent from 80,000 engines by 2016, Chief Executive Officer Olof Persson said in Bangalore on Thursday.
The long-term capacity of the engine factory is 100,000 engines, Persson said. Around 30 percent of that is going out of India into the European system.
Volvo, which operates in India alongside local partner Eicher Motors Ltd, joins a growing list of global automakers seeking to use the country as a manufacturing centre for parts and components to cut costs and as an export hub to other emerging markets around the world.
Volvo draws up Rs 2,000 cr investment roadmap in India
(PTI) Volvo Group plans to invest Rs 2,000 crore in India to expand its truck, bus and construction equipment business, its President and Chief Executive Officer Olof Persson said today.
"....we are talking about 20 billion (rupees) going forward in the next coming years," he told a press conference here, adding the proposed investment would be in manufacturing, research and development and facilities.
"We are committed to India going forward in terms of investment," Persson said.
Separately, he added that VE Commercial Vehicles Ltd (VECV), a 50:50 joint venture between the Volvo Group and Eicher Motors Ltd (EML), would make an investment of Rs 1,800 crore in the next couple of years.
This investment would be towards massive modernisation of Eicher product range, exporting the products and setting up of new engine and busbody plants, paintshop and new test facility, Persson said.
The joint venture is setting up a plant at Pithampur in Madhya Pradesh, which would have full capacity to produce 100,000 engines by 2016. The Volvo Group, the world's second biggest truck company, aims to source 30 per cent of these engines for its European operations, he said.
The Volvo Group is looking to expand the size and responsibility of India hub, he said, adding, the swedish truckmaker expects the Indian market to grow faster than other regions, given the proposed investment and potential in this country.
Officials added that the Volvo Group in India constitutes three legal entities -- Volvo India Private Limited (VIPL) and Volvo Buses India (VBI) and VECV.
The automaker will work with Eicher to accelerate localisation of parts in the engines produced at the plant in Pithampur, central India, Persson said.
The Swedish truckmaker's plants in Europe were operating at less than full capacity, the company said last month, and it forecast no truck market growth in European or US markets next year.
Volvo, which makes trucks under the Renault, Mack, UD Trucks and Eicher brands as well as its own name, said last month that operating profit for the quarter to September halved from a year previously, as new orders during the period fell 25 percent.
The Volvo Group will spend 20 billion rupees ($363.83 million) in India, Persson said without providing a timeline, in addition to the $330 million that Volvo and Eicher will spend on the 50-50 joint venture over the next two years.
Volvo is also one of a slew of global players, including major rivals Daimler AG and Scania AB, racing to grab a slice of India's buoyant truck and bus market dominated by Tata Motors Ltd and Ashok Leyland Ltd as traditional markets slow.