Volvo Eicher Commercial Vehicles (VECV), the equal joint venture between Volvo Group and Eicher Motors, expects to invest a total of Rs25bn (US$471.41m) by 2013. These investments are part of Volvo Group’s strategy to make India a global development and manufacturing hub.
“We have already invested Rs7bn last year, under the joint-venture company, and will invest the remaining capital by 2013,” The Economic Times quotes Vinod Aggarwal, Chief Executive Officer of VECV as saying.
The JV is currently setting up an engine manufacturing facility in Pithampur, Madhya Pradesh, which is expected to be operational by mid-2013. This plant will have the capacity to build 100,000 medium-duty 5- and 8-litre automotive engines per year.
“The new plant will serve as a global hub for the European market as it is more cost-effective. The plant will start pre-production by December this year. These engines are also being adapted for Euro III and IV emission requirements and the same will be used for Volvo Eicher heavy-duty trucks also,” the report quotes Aggarwal as saying.
Eicher is also setting up a bus body building facility in Dhar, Madhya Pradesh at an investment of Rs1.25bn in the first phase. This plant is scheduled to commence operations in the second quarter of next year. In addition, VECV is also boosting capacity at its components plant in Dewas, Madhya Pradesh.
VECV reported sales of 3,150 Eicher branded trucks and buses in India last month. This figure was 31.9% lower than what the JV had managed in September 2011. As a result, the company’s sales in the first nine months of 2012 rose 2.5% to reach 36,720 units. This compared with 35,833 units sold in the January-September 2011 period.
