Volvo AB aims to eventually export 30 percent of the capacity at its Indian engine plant opening next year as the world's No.2 truck maker looks to leverage cost-efficiencies from its operations in Asia's third-largest economy.
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