Volvo set to ramp up production

Volvo India, the subsidiary of the ¤27 billion Volvo Group, will increase its production by 66 per cent during 2008. The company plans to manufacture 1,500 vehicles (1,200 trucks and 300 buses) in 2007.

Volvo has a manufacturing unit at Hoskote near Bangalore and is undertaking the capacity hike to meet the requirements for trucks and buses in the domestic and export markets.

Eric Leblanc, managing director, Volvo India, said, "We will be ramping up our production next year. That will not require any additional investment, but we will add few more workers to take up two shifts a day. The new capacity being added will be used to meet export commitments next year. We are looking at exporting 1,000 trucks in 2008."

Volvo sold 650 trucks and 300 buses in India last year and is aiming at 15 per cent growth this year. The growth in the Indian market is being driven by the surge in demand from the infrastructure sector, coal mining and general cargo and logistics sectors, Leblanc told reporters. The company, which exported 120 trucks to Korea in 2006, plans to export 300 units in 2007 to Myanmar, China, Indonesia and Vietnam.

"We are looking at lower freight cost and delivery time for exporting to China. Costwise, it is advantageous to supply completely-built-units from India to China than exporting from Sweden to China. We will import CKD kits from Sweden and assemble them at the Bangalore plant and export to China," he said.

Volvo India has set up a new joint venture with Jaico Automobiles of the Azad group to manufacture bus bodies at Bangalore. Volvo holds 70 per cent stake in this JV.

It is building a new plant to produce 1,000 buses at Hoskote adjacent to its truck making facility. It will commence production by December 2007, Leblanc said. The company will export 50 per cent the production to West Asian and South East Asian nations.

Volvo will make both city buses and inter-city buses at this plant. The company has already delivered 10 buses to Pune and has an additional order for supplying 20 buses to Bangalore Metropolitan Transport Corporation and waiting for an order from Tamil Nadu transport corporation.

The company is also in talks with Delhi Transport Corporation for supply of CNG buses, Leblanc added.