The Swedish commercial vehicle manufacturer Volvo AB, which is the world's second largest maker of trucks said that the company will invest Rs. 2,000 crore in India. The period in which the investment would be made was, however, not specified. The company plans such a huge investment in order to establish its footprint in India, one of the largest economies of Asia. Olof Persson, Chief Executive Officer (CEO) of Volvo group said that this investment does not include the Rs. 1800 crore investment that the Volvo group plans to make in the country through its joint venture with Eicher Motors Ltd-VE Commercial Vehicles Ltd.
Persson while talking to reporters on the matter in Bangalore said, "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."
Volvo and Eicher Motors hold 50 per cent stake each in the four year old joint venture that rolls out Volvo and Eicher-branded buses and trucks. The VECV investment would be used for creating a new test facility and setting up a new engine plant, apart from product development and several other things.
Persson further added "We are extremely pleased by how the Volvo-Eicher JV has developed. We will continue to develop this very successful JV going forward."
The company also aims to increase the production capacity at its engine plant located in Pithampur in Madhya Pradesh. Talking about it, Persson who is on his first visit to India after taking over as the CEO of Volvo group a year ago said, “The long-term capacity of the engine factory is 100,000 engines." He further added that. "30% of that is going out of India."
India's truck market is looked as a good place to conduct business by the global auto makers including Volvo, Daimler and Scania, who are all trying to capture some portion of the market share which is mostly dominated by the domestic players like Tata Motors and Ashok Leyland. Persson said, "We are also readying a product line to tap the value segment, a space in which we are not yet present."
