Prior to this, the company had met the demands of trucks from various customers through imports. Scania will start its supply from its Indian plant soon, said Anders Grundstromer, managing director, Scania Commercial Vehicles India and vice president, Scania Group.
The company will commence production of buses at its Narasapura plant from next fiscal onwards and set a target of 35% share in premium/luxury buses and 25% share in premium/heavy duty trucks of the Indian market in the next three to five years, he added.
Speaking to the FE, Anders said: Though we have been in India for the last few years, we have been overwhelmed with the recent major orders of 60 premium trucks from Krishnapatnam Port Company and 120 luxury buses from Siddhivinayak Logistics, which we met through imports from our parent. Anticipating a sharp surge in demand for our premium products due to its sheer advantage of total cost of ownership, we have decided to ramp up production of trucks from August and would commence production of buses from next fiscal.
To give customers a competitive advantage and to shore up sales, the company is fast developing its vendors base and has added nearly 30 suppliers to its credit in India.
However, the company said it since it is particular about maintaining quality when it comes to drive line, which include engine, gear box and transmission, the company will continue to import and assemble at Bengaluru. There is a vast scope that the localisation level will go up from 18% to 50% in the next one year or so based on the volume, Anders said. He, however, said the body will be completely localised to 100%.
The company said it will operate only in the heavy truck segment 16 to 49 tonne in India as mining coal blocks throw huge opportunities for the company.
The market for premium trucks pegged at 1,200 units per annum in India and expect to touch 8,000 units per annum by 2018. Our plans to sell 2,500 trucks per annum as early as possible and we can double our capacity as and when demand for trucks pick up, Anders said.
The premium/luxury bus market in India is pegged at 1,000 to 1,200 units per annum with Volvo and Mercedes being the dominant players. With the local production expected to go on stream from next fiscal, Scania hopes to capture 35% of this premium bus segment in India in the next three to five years with more than 1,000 units per annum. The premium bus segment expect to touch 4,000 units per annum by 2018, he added.