Volvo to set up construction equipment unit

Volvo Construction Equipment (Volvo CE), part of AB Volvo, plans to set up its first manufacturing unit in India, as an extension of its existing heavy commercial vehicles unit near Bangalore, Keith J Ellis, president, Volvo CE, Asia markets, said.

Volvo India Pvt Ltd operates primarily in the bus and truck business.

Volvo CE is already conducting a study to recognise the ideal product mix to manufacture for the Indian market.

But it is most likely to come up with a 'backhoe loader' manufacturing unit, hinted Ellis during his interaction with mediapersons at the 7th International Mining and Machinery exhibition, jointly organised by the Confederation of Indian Industry (CII), Ministry of Coal and Mines, Government of India and Coal India Ltd.

"India creates a huge demand of around 6000 units per year for backhoe loaders. It would thus make sense to set up its manufacturing unit, though the plan is yet to be finalised", added Ellis.

Industry sources believe that such an project would call for an investment of around $10-50 million.

The company might also explore the possibility of partnerships, informed Ellis. "The major expansion of Volvo group has been through acquisitions. We do not want to close similar opportunities in India. It does not mean that Volvo is looking for joint ventures only," he added.

After China and Korea, India is perhaps the largest market for construction equipment registering a growth of around 30 per cent, informed Ellis.

"As of now nearly 300 construction machinery units have been sold in India in the current year and is expected to remain robust", he added.