NEW DELHI: Swedish commercial vehicle giant Volvo on Friday said it will make India a hub for medium-duty engines for which the company will make new investments in its local joint venture with Eicher. VE Commercial Vehicles (VECV), the joint venture between Eicher and Volvo, will see investments of Rs 288 crore to boost engine capacity at its Pithampur plant in Madhya Pradesh by 85000 engines a year. The current capacity at the plant is 40000 engines.
"This investment by VECV in its Pithampur plant gives the Volvo group a complete facility in India for manufacturing and assembling the new medium-duty engine which will be introduced in the Volvo groups trucks and buses worldwide over the next few years. Additionally, these engines will also be used for Eicher's range of heavy-duty commercial vehicles," Par Ostberg, president (trucks Asia) for Volvo group and chairman of VECV, said.
VECV MD & CEO Siddhartha Lal said the decision will catapult the company into one of the largest commercial vehicle engine manufacturers in India and will give it the capability well beyond any of its competitors.
"The new capacity will come onstream in the second half of 2012, initially to serve Volvo group's and Eicher's local requirements and later for exports," Lal said.
Lal said the fresh investments would be over and above the Rs 500 crore investment that VECV had announced in January to expand production capacity and develop new engine technology over the next three years.
The plant will do the final assembly of 55000 Euro 3 and Euro 4 engines from 2012 and will start shipping a year later 30000 base engines to Volvo's plant in France for final assembly of Euro 5 and Euro 6 engines. "Indian market is extremely important and in a few years will become one of the most important countries in terms of turnover and profitablity for us," Ostberg added.
"This investment by VECV in its Pithampur plant gives the Volvo group a complete facility in India for manufacturing and assembling the new medium-duty engine which will be introduced in the Volvo groups trucks and buses worldwide over the next few years. Additionally, these engines will also be used for Eicher's range of heavy-duty commercial vehicles," Par Ostberg, president (trucks Asia) for Volvo group and chairman of VECV, said.
VECV MD & CEO Siddhartha Lal said the decision will catapult the company into one of the largest commercial vehicle engine manufacturers in India and will give it the capability well beyond any of its competitors.
"The new capacity will come onstream in the second half of 2012, initially to serve Volvo group's and Eicher's local requirements and later for exports," Lal said.
Lal said the fresh investments would be over and above the Rs 500 crore investment that VECV had announced in January to expand production capacity and develop new engine technology over the next three years.
The plant will do the final assembly of 55000 Euro 3 and Euro 4 engines from 2012 and will start shipping a year later 30000 base engines to Volvo's plant in France for final assembly of Euro 5 and Euro 6 engines. "Indian market is extremely important and in a few years will become one of the most important countries in terms of turnover and profitablity for us," Ostberg added.
TOI
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