Volvo Group to Invest Rs.2,000 cr in India
Sweden ‘s Volvo AB, the world’s number two truck maker, said it will invest ₹ 2,000 crore in India over an unspecified period, as it seeks to establish a stronger footprint in Asia’s third – largest economy.
This is in addition to the ₹ 1,800 – crore investment the Gothenburg – based auto giant plans to make through its joint venture with India’s Eicher Motors Ltd – VE Commercial Vehicles Ltd, according to Olof Persson, CEO of Volvo Group. The VECV investment, which will be through internal accruals, will be used for product development, creating a new test facility and setting up a new engine plant, among other things.
“With the investments that we are making here and the plans we have for the Indian market, we expect growth rates here to be higher than many other markets,”” Persson told reporters in Bangalore. Volvo and Eicher Motors hold an equal stake in the four – year – old joint venture that sells Volvo and Eicher – branded trucks and buses.
“We are extremely pleased by how the Volvo – Eicher JV has developed. We will continue to develop this very successful JV going forward,” said Persson during his first visit to India after taking over as chief executive last year. There are also plans to increase capacity at its engine plant situated in Pithampur, Madhya Pradesh. A top executive working with VECV had earlier said the plant would serve as a hub for the European market.
“The long – term capacity of the engine factory is 100,000 engines,”” Persson said, adding that “30% of that is going out of India.” Dominated by domestic players like Tata Motors and Ashok Leyland, India’s buoyant truck market is seen as one of the most lucrative by global automakers, including Volvo, Germany’s Daimler and Sweden’s Scania.
The decision to up its spending in India comes soon after Volvo reported disappointing third – quarter results in October. Orders and demand for trucks continue to plunge in Europe and the United States, hurt by the ongoing European debt crisis, and a stuttering US economic recovery.
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