VE Commercial Vehicles (VECV), a joint venture between Volvo Group and Eicher Motors, is in talks with Swedish truck and bus maker, Volvo Group for supply of various automobile components to Volvo’s global manufacturing plants. It is already in the process of exporting engines to Volvo.
“We are currently exploring the opportunities of supplying drive line components like transmission gears, shafts and axle parts to Volvo’s global requirements from India. We are in talks with the Volvo management and are yet to take a final decision,” Vinod Aggarwal, chief executive officer, VECV told Business Standard.
VECV has automobile component manufacturing units at Thane in Maharashtra and Devas in Madhya Pradesh.
He said VE Powertrain (VEPT), a division of VECV is already setting up an engine plant with 100,000 units per annum capacity at an investment of Rs 600 crore at Pithampur in Madhya Pradesh. This plant will meet the medium-duty automotive engine requirements of Volvo globally for five and eight-litre engines. These will be four-and six-cylinder diesel engines. The domestic requirements will also be met from this capacity.
The 100,000 units per annum plant, set up at a cost of Rs 600 crore, will be operational in July 2013 and it will manufacture the Euro 6-compliant diesel engines to Volvo Europe. It will adapt the same engine to Euro 3 and 4 engine technologies to meet VECV requirements in India, he said.
These Euro 3 and Euro 4 engines will cater to the requirements of VECV and also other emerging and Asian country requirements of both Volvo and Eicher.
“The setting up of this engine plant is crucial for us as we are looking at 15 per cent market share in the country by 2015 from the present 4 per cent,” Aggarwal said.
The Volvo and Eicher joint venture company is looking at making India a global hub for supply of medium duty engines for Volvo’s global requirements, he said.
VECV, which sold 48,300 trucks and buses in India in 2011, is looking at a growth of about 2 per cent in 2012. “The growth in truck market is subdued this year due to delay in execution of mining, construction and infrastructure projects. If the government of India lowers interest rates and puts infrastructure projects back on track, we can expect normalcy to return next year,” Aggarwal said.
In the first nine months period ended September 2012, VECV has sold 6,000 trucks and it hopes to end the year with about 8,500 trucks, registering a growth of about 13 per cent over 2011, he said.
VECV markets mass-market trucks and buses made by Eicher and high-end premium trucks made by Volvo in India. It also makes components for Eicher, Volvo besides other OEMs.
