Volvo mulls excavator production in India

Volvo India, the Indian subsidiary of Volvo AB, the Swedish bus, truck and construction equipment maker, is actively considering a move to expand its construction equipment (CE) product range in the country.

The company, which acquired Ingersoll Rand's road machinery unit globally including India in May 2007, is aiming at increasing its marketshare in the construction equipment market in India.

In 2007, Volvo sold 1,400 construction equipment (500 of them came after the acquisition of Ingersoll-Rand), a growth of 100 per cent over the previous year.

"CE business is today our biggest business unit in India and we are looking at even higher growth rate this year," Eric Leblanc, Managing Director, Volvo India said.

Volvo presently imports backhoe loaders, excavators and motor graders from its factories in Korea, Canada and Sweden.

"Manufacture of a wide range of excavators in India is our prime focus at the moment and we are considering a proposal in this regard," Leblanc told Business Standard.

In excavators segment, Volvo presently has a market share of 13 per cent. "We have a long term ambition to grow it further," he said without mentioning the amount of fresh investment being made for this expansion.

He, however, did not give a time frame as to when the company will start manufacturing excavators in India. "Presently we don't have the full range of construction equipment in our portfolio. The acquisition of IR has given us some products in the road making machinery segment, but we wish to manufacture a few range of construction equipment in India. There is a strong growth in the infrastructure sector in the country, which has made us think of expanding our offers to the Indian market."

In addition to the CE segment, Volvo is also looking at expanding its truck portfolio by launching lower capacity trucks in India. The company is considering launching Nissan diesel trucks in the 16-tonne payload capacity. In the heavy duty cargo truck segment, Volvo has 50 per cent market share in India.

Last year, Volvo sold 800 trucks in India, a growth of 6.6 per cent over that of 2006. While it exported 230 trucks to Korea and Afghanistan. The company also sold 200 buses last year and targetting 450 in 2008.

"We are presently conducting a feasibility study in India for introducing Nissan diesel trucks. If it is found viable, we will then approach the government for carrying out homologation of these trucks," Leblanc said.

The study is expected to be completed by middle of this year, he said adding that a decision will be taken after that. Volvo is planning to launch 16 tonne and above capacity trucks priced in the range of Rs 35 lakh and Rs 60 lakh.