Volvo Bus Corporation, the Swedish auto major is contemplating on ramping up its Hoskote plant near Bangalore, with an investment of Rs 400 crore. The investment will happen in a phased manner in the next five years, according to the company.
The company is also expanding its Chinese facility as India and china are strategic markets for Volvo, given the sagging sales growth in North America and Europe due to economic slowdown.
Celebrating Volvo's tenth anniversary in India, Hakan Karlsson, president and CEO, Volvo Bus Corp, said: “We have an expansion plan for Asia where India and China will be the key drivers of growth. What is more, we want India to be a global hub to deliver our global selective model. An estimated 15-20 percent of the projected sales in the country will be thorugh exports". Volvo currently exports to Africa, Middle East and South Africa from India.
Volvo has greater plans for its India operation as the firm aims at diversifying into mid segment. In order to achieve its stated objective, the Swedish commercial vehicle manufacturer plans to increase its production capacity five fold to 5,000 units by 2015.
The company is setting up an additional plant, near its first plant in Hoskote. The existing plant has a capacity of producing 1,000 vehicles, which now it plans to rejig to manufacture 1,200 units in the next couple of months. As part of its strategy to bring down the price and increase the volume, the company has its roadmap laid well in India with greater emphasis being laid to localisation.
Akash Passey, Managing Director and CEO of Volvo Buses India said: "Currently, the localisation level in our firm is around 40 percent. We are aiming at achieving a higher level of localisation by about 80 percent by by 2015. Ultimately, our target is to take Volvo into a $ 1 billion firm in the country in the next five years".
Reminiscing a decade long association of Volvo in India, Passey said: "Ten years back, when we entered India, there was no premium segment for buses. Subsequently, our journey through out was smooth. Secondly, we had a wide range of product portfolio. That way, we design part of the vehicles for India was not an issue. India has come a long way when it came to the infrastructure development.
India has farily good roads, compared to many countries, where there are no metal roads. In future, with greater emphasis being laid to the development of infrastructure across the country, our journey would be much more smoother".