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K. Giriprakash

Bangalore , Nov. 25

TRUCK MAKER Volvo said on Thursday that it expects to record up to 100 per cent growth in its Indian operations this calendar year and it has decided to set up a full-fledged engineering centre in Bangalore.

"Our growth has been extremely strong across all businesses. We expect to record a growth between 50 per cent and 100 per cent in each of our businesses," the Volvo India Managing Director, Mr Ulf Nordqvist, told Business Line. This will be Volvo's highest growth since it set up its operations in India in 1998.

In 2003, Volvo posted revenues of around Rs 360 crore and sold 1,700 trucks, 300 buses and 600 units of excavators, articulated haulers and other such equipment.

Mr Nordqvist said during the first half of 2005 Volvo will set up a full-scale engineering facility in Bangalore. Some of the work being carried out in other countries will be outsourced to India.

"It is a big thing for us. We will outsource some of the work carried out elsewhere to India," he said.

Mr Nordqvist said details about the engineering centre was being worked out. Hence a decision on the number of engineers required will be taken in the early part of next year. He said most of the investment will happen in manpower acquisition. Volvo had earlier said that it also plans to outsource more software development work to India from other countries.

Volvo has a tie up with MindTree Consulting in India for development work.

Mr Nordqvist said by the end of the year, Volvo expects to export around Euro 23 million of auto components from India compared with Euro 14 million in 2003. He did not specify the target for 2005.

Mr Nordqvist said one of the reasons for strong sales was because of the restructuring of the organisation undertaken last year. He said shifting to a new platform for trucks had also resulted in higher sales apart from a good growth seen in the mining sector. Volvo India recently shifted to a completely new platform used globally. The newer trucks are based on FM (forward control medium cabin) platform while the earlier trucks were based on FH (forward control high cabin) platform.

Volvo has also devised a new marketing strategy for the country which includes splitting the entire truck market into separate segments and focus on each of them to gain a market share. For example, for sectors such as mining and tractor-trailer applications, there is separate marketing strategy. The truck maker already has a 65 per cent share in the high-end truck segment.

More Stories on : Outlook | HCV/LCV/Tractors

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