Volvo to double India sourcing

Components worth up to 30 mn euros are likely to be sourced from the country this year

India and China are set to emerge as hubs for Swedish commercial vehicle major A B Volvo for sourcing of its components for global use.

Global sourcing of components of the company from India itself is set to double this year, with components worth 25 million to 30 million euros likely to be sourced from India.

Last year, Volvo sourced components worth 14 million euro from India.

In line with the industry growth, Volvo India Pvt Ltd aims a growth of at least 30 per cent this year. The company's turnover grew 27 per cent from Rs 281 crore in 2002 to Rs 356 crore in 2003. The company expects a growth similar to that in the last year.

"While the commercial vehicle industry grew by around 35 per cent to 38 per cent last year, the growth in the tractor trolley segment (huge multi-axle trucks) grew by around 80 per cent. This shows that the heavy duty truck market is picking up in a big way in the country," said Mansoor Ahmed, head, marketing, for Volvo India Pvt Ltd.

The trend is that truckers are shifting from two-axle trucks to three-axle trucks and higher versions.

"The central government is now seriously considering stipulating norms for power-to-weight ratio for commercial vehicles. Heavy vehicles like those manufactured by Volvo help reduce congestion and offers quicker services because of the high power," Ahmed said.

Volvo India, which commenced production in India in 1998, has so far over 1,800 vehicles on the road.

Launched in 2001, the company has sold over 400 Volvo luxury buses too, mainly in the southern and western parts of India.

Volvo India is at present expanding its operations in north India, after which an expansion drive will be undertaken in the eastern parts of the country, Ahmed said.

Volvo recently introduced its FM platform of vehicles of tractor trailers and tippers ranging from 300 HP to 460 HP. These vehicles are priced between Rs 29 lakh and Rs 50 lakh and are available in several variants for different applications.

The tractor trolleys are basically in the 40-tonne capacity and above range.

Apart from the company's manufacturing facility near Bangalore, there are as many as 50 points from where spares and other facilities are provided. The company has also set up five regional warehouses in different parts of the country for efficient back-up services.

Ahmed said Volvo India will look at increased exports of both trucks and buses to areas surrounding India as well.

"We are looking at that option closely. We have already begun exporting vehicles to neighbouring countries and exports of trucks and buses to other countries will see an increase in the coming years," he said.