The plant, set up with an investment of Rs 80 crore, will also feed neighbouring countries, South East Asia, and Africa.
BANGALORE: Counting on demand for superior intra- and inter-city transportation, Volvo Bus Body Technologies (VBT), the 70:30 bus body building joint venture between Sweden’s Volvo Bus Corp and New Delhi-based Jaico Automobiles, hopes to more than double its sales this year to 450 units.
The plant, set up with an investment of Rs 80 crore, will also feed neighbouring countries, South East Asia, and Africa.
“We are already sold out for the first six months of production,” Akash Passey, managing director, VBT, said. The peak capacity of the plant is 1,000 units annually, which is targeted to be achieved by 2010.
Volvo Bus Corp, part of Sweden’s commercial vehicle major Volvo, has sold about 1,600 buses in India over the last seven years. Now, looking at rising demand from local municipal bodies (for city transport) and intra-city transport, the company is looking at achieving that number on an annual basis in the near future.
Volvo operates at only a small part of the 25,000 per annum bus segment in India. Globally it sold about 11,000 heavy duty buses, with equal split from the Americas, Europe, and rest of the world. “India is one of our most important markets in Asia, and all our three business segments-trucks, buses, and construction equipment-are investing heavily here,” Hakan Karlsson, president, Volvo Bus Corp, said.
Recently Volvo signed a letter of intent with Eicher Motors, under which the latter’s commercial vehicles business would get divested to a joint venture company in which the Swedish major would hold 45.5% stake. In a global deal, Volvo construction equipment has acquired Ingersoll Rand’s road construction unit. Ingersoll Rand has manufacturing unit in India.
Without specifying details, Karlsson said Volvo plans to increase component sourcing from India, and use India as a manufacturing base to supply to markets like neighbouring countries, South East Asia, and Africa. In an earlier interaction with DNA Money, Eric Leblanc, managing director, Volvo India, had said the company would increase component sourcing to 70 million euros from 50 million euros it did in 2006.
Other key markets for Volvo bus in Asia Pacific are China, Singapore and Australia. While it sold about 200 units in India, China sales were over ten times that figure. The company has two manufacturing joint ventures in China.
g_rabin@dnaindia.net
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