Volvo, Eicher JV to invest over Rs 600-1,000 crore in India

New Delhi: At a time when truckmakers are cutting production and laying off people, VE Commercial Vehicles (VECV) - a joint venture company of Volvo and Eicher Motors - is investing over Rs 600-1,000 crore to add a second manufacturing line at its Bangalore plant, double the bus plant capacity in Pithampur in Madhya Pradesh.

Volvo Group will be investing in the expansion of capacity at its Bangalore plant for a second manufacturing

line, where the new Pro 8000 trucks will be manufactured. VECV, the JV company, will be investing another Rs 600 crore to bring the 'Pro' series into the market.
Vinod Aggarwal, CEO, VE Commercial Vehicles, told ET, "These two years have been the most difficult period and we have sustained these two years with glory. Even in this difficult period, we have executed our strategy on time and in the most efficient manner. The next one year is going to be exciting, as we would be launching a new range of trucks over the next 12-18 months (5-49 tonnes)."

Most part of the new Pro Series range starting with Pro 1000 light duty trucks will be launched this month, followed by the 3000 series medium-duty trucks in March, then 6000 and 8000 heavy-duty trucks in the second half of this year.

To make the most of the new range of trucks, in order to focus on sales, VECV is restructuring its sales and marketing functions, by creating separate verticals for light and medium-duty trucks, heavy-duty trucks and buses and the same will be replicated in the showrooms as well.

Declining to comment on the exact quantum of investment in the second manufacturing line in Bangalore, Philippe Divry, senior VP, Trucks Joint Venture India said, "It is part of our overall investment plan in Bangalore; we are still in the investment phase. The PRO 8000 series will be built there. The second line will be ready by the middle of year."

VECV posted 15.5% decline in volumes in 2013 better than the overall market decline of 24.7% in 2013 in the 5 tonne-49 tonne category. The overall market came down to 297,316 units from almost 4 lakh units sold in 2012. The likes of Tata Motors and Ashok Leyland announced VRS schemes in their plants while Volvo Eicher is likely to hire more people to meet the demand of its new products.

The company posted its highest ever market share of 13.8% in 2013. Eicher's light and medium-duty market share declined marginally to 30.4% in 2013 as compared to 31.4% in CY 2012. It marginally improved the market share to 4.4% in the heavy-duty truck space and increased market share in buses to 13.5% jumping 150 basis points.

The sales of the company have doubled since setting up a joint venture with Volvo. In an era of discount war when other truckmakers are bleeding, Eicher Motors had the highest margin by a truckmaker in India of 6-6.5% for the first nine months of 2013.

"We have a very strong game plan to reach 15% market share in medium- and heavy-duty trucks," said Siddhartha Lal, MD and CEO Eicher Motors.

Volvo to invest Rs 400 crore, set up research centre

NEW DELHI: Swedish vehicle-maker Volvo will invest Rs.400 crore to set up a research and development (R&D) centre and expand capacity in India to earn $1 billion in revenue from its operations in the country by 2015.

"We are looking to sell 5,000 buses in India by 2015. For this there will be an investment of Rs.400 crore which will include a research centre and capacity expansion," Hakan Karlsson, president and chief executive, Volvo Bus Corporation, told reporters here Thursday.

Karlsson said the R&D centre and sourcing of parts locally would help in developing buses for India and for export purposes.

"A significant part of the Rs.400 crore investment would go into the R&D centre. This will help in developing buses for India and other markets."

Currently the company sells around a 1,000 buses in the country to the private sector, institutions and to city transport departments. India would be the second largest market for the company after China by 2015.

Karlsson added that in the coming year the company also planned to strengthen its service network in the country.

The company launched three new buses in different segments like city buses and coaches.

The company introduced the Asian bus range multi-axle coach 9400PX with a length at 14.5m making it the longest inter-city coach in India. The bus has a capacity to accommodate 105-to-110 passengers depending on the seating configuration.

The company also launched 7400XL another multi-axle bus with a steered axle and Volvo 9100 which was launched for the global market from India.

The company added that it will showcase the world's first commercially viable hybrid bus -- Volvo 7700 Hybrid at the Auto Expo here next month.

"We will be showcasing the 7700 Hybrid. But I cant say when will we launch it, as this will depend on the Indian market," said Karlsson.

With these launches, the company now offers 10 bus models in the country.