VE Commercial Vehicles, a joint venture between Swedish automaker Volvo and Eicher Motors, is planning to invest Rs 500 crore this year for business growth and aims to increase truck volumes by 50 per cent to meet the growing demand.
It is also awaiting board approval for setting up a third plant at an investment of Rs 300-400 crore in the next two years, said Vinod Aggarwal, managing director and chief executive of VE Commercial Vehicles (VECV).
"The company consistently invests Rs 400-500 crore every year and the investment this year will also be around Rs 500 crore," he said.
Aggarwal said a new plant requires an initial investment of Rs 300-400 crore or more.
"A proposal for this has been sent to the board for approval, which is expected in the next two months," he said.
The combined capacity of the two plants at Pithampur in Madhya Pradesh is 80,000-90,000 units per annum, and the new plant will manufacture another 40,000-50,000 units, according to him.
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Eicher Trucks and Buses, a part of VECV, today rolled out two new heavy duty trucks - 49-tonne Pro6049 and 41-tonne Pro6041.
"Our truck sales volumes are 1,000 units per month. Our target for this year is to sell 1,500 units and these two newly launched products will contribute to the demand," Aggarwal said.
VECV reported 30 per cent growth in volumes to 64,866 units in the previous fiscal.
The company's market share last year in the light and medium duty trucks (5-15 tonnes) stood at 32.2 per cent and 17.2 per cent in the buses, while it could corner only 4.6 per cent of the total market pie in the heavy-duty truck segment.
Aggarwal said the company has started exporting its vehicles to Indonesia and South Africa and some 9,000 units were shipped out last year.
"At present exports account for 15 per cent in the total volume, which we aim to increase to 20 per cent going forward," he said.
He also said that the engine production is being enhanced to 75,000 units this year from 50,000 units due to the increased demand.