Scania Commercial Vehicles India (SCVI), a 100 per cent subsidiary of Scania, the Swedish manufacturer of heavy trucks, buses, coaches as well as industrial and marine engines, on Tuesday announced setting up an assembly plant near Bangalore at an initial investment of Rs 150 crore.
The company has purchased 25 acres at the Narasapura Industrial Area in Kolar district, about 52 km from Bangalore from the state government to set up the assembly plant. To begin with, the company plans to assemble heavy trucks for mining, construction and on road heavy haulage applications at the plant which will be operational during the first quarter next year, a top company executive said.
“We will first manufacture trucks for mining and construction segment at this plant which will be marked and serviced by our partner, Larsen & Toubro Limited. We will also produce some on-road trucks for cargo segment, which will be marketed through our own distribution network,” Henrik Fagrenius, managing director, SCVI said.
Scania entered the Indian market in 2007 with fully-built trucks imported from its Swedish facility for mining and construction segments. It formed a marketing and service arrangement with L&T Limited. Since its launch they have sold 600 trucks in India.
“This unit will enable us to shorten our lead times and enhance service levels to our customers,” he said. In the second phase, Scania aims to start assembling super luxury buses for inter-city applications at the plant for which it will invest an additional amount, he said.
The company is looking to manufacture 2,000 trucks and 1,000 buses within five years in India. It also plans to upgrade the facility into a complete manufacturing plant at a later stage when they achieve annual sales mark of 10,000 units, Fagrenius said.
Scania plans to employ up to 800 people in this facility over the next five years. It also plans to source different components for engine, chassis and body from vendors in India for both Indian plant and global manufacturing plants, he said.
“We are already sourcing some components from Indian suppliers and we are looking at increasing it further,” he said without giving exact numbers.
Fagrenius said the company is also preparing to sell 1,500 engines per annum within next five years to its OEM customers. These engines are more compact, resulting in lesser fuel consumption, leading to lower emissions, he claimed.
