The Sweden-based Volvo Group has decided to develop India as a hub for manufacturing medium-duty engines for trucks and buses through Volvo Eicher Commercial Vehicles (VECV), a 50:50 joint venture between it and Eicher Motors.
VECV, operational since July 2008, would invest Rs 288 crore to set up a new engine making unit at the company’s factory in Pithampur, MP, to manufacture 5-litre and 8-litre engines for medium and heavy duty trucks and buses, globally and for India. VECV is already producing 40,000 engines per year at Pithampur.
“This investment by VECV in its Pithampur plant gives the Volvo Group a complete facility in India for manufacturing and assembling the new medium-duty engine, which will be introduced in the Volvo group’s trucks and buses worldwide over the next few years,” said Par Ostberg, president, trucks, Asia, Volvo Group, and chairman, VECV.
The new unit, expected to be operational in the second half of 2012, would manufacture 85,000 engines a year. Around 55,000 of these would meet Volvo’s global requirement for Euro-III and Euro-IV, engines as well as VECV’s requirement of Eicher heavy-duty commercial vehicles. The remaining 30,000 base engines would be exported to Venissieux in France from from 2013, to cater to the Group’s Euro-V and Euro-VI requirements.
“VECV has been entrusted with building the medium-duty engine for Volvo Group’s global requirements at our facility in Pithampur. This is possibly the largest such project in India and certainly the most technologically advanced, as we will be producing base engines capable of Euro-VI emission norms,” said Siddhartha Lal, MD & CEO, VECV.
“We foresee a big volume base in India. This, coupled with the country’s low production opportunity and proximity to other high volume markets like China and Southeast Asia, has helped us to set up base here,” added Peter Karlsten, president, Volvo Powertrain.