The Hindu Business Line : Volvo wants to make a big push in India

SWEDISH multinational AB Volvo wants to give a big push to its operations in India even as it is pleased with the progress that it has made in the last eight years here.

The $29-billion company, which has a presence in trucks, buses, construction equipment, and diesel engines, is not averse to acquisitions in the country if it finds the right candidate to do so.

In a recent interview to a group of visiting journalists from India, China, South Korea, and Japan, at AB Volvo's headquarters in Gothenburg, Mr Leif Johansson, President and CEO, said: "We came into India wanting to make it a hub for all the products that we are producing there including the supplier base. I'm pleased with the progress ... but I am an impatient man and would say we should grow quicker. But then, my job is not to be pleased; my job is to push it big and I would like to push even further in India."

On the possibility of growing through acquisitions, Mr Johansson said: "Would we grow by acquisitions in India or China or any parts of Asia if we had the opportunity? The answer is yes, we would. I don't think we have any regulatory limits to what we can do. It becomes a matter of finding the right apple trees (companies) and be able to make those acquisitions with financial discipline and then convince ourselves also that we could take that company into the group and do well with it."

Volvo aims for Asia to contribute about 20 per cent of its total sales by the year 2010 and sees India and China as central to this strategy.

The company is committing record investments to develop newer products and widen its range in order to service the different growing markets in Asia, in particular.

"India and China are big markets for us and they are now turning sophisticated," Mr Johansson said.

Apart from commercial vehicles, AB Volvo also has a division that deals with IT.

On whether Volvo Information Technology, a division of AB Volvo, plans to tap the IT expertise available in India, Mr Johansson replied in the affirmative even while taking care not to rub off his European employees the wrong way.

"We have done well in India with IT resources and also on the engineering side. We think of it less as an outsourcing and more as a natural component in our global footprint. There's a good availability of IT expertise and resources in India and I see it as a natural extension of our global footprint but our intention in the main is not to export jobs from Europe to India."

Volvo's entire business revolves around diesel engines and when asked about its future, given the rising price of oil, Mr Johansson pointed out that the diesel engine is not one that only burns diesel oil.

"It is a converter of energy from liquid fuel to mechanical energy. That means that we can burn in a diesel engine alternative fuels that come from biodegradable sources. The new emission norms that are expected in the future will make diesel engines with alternative fuels the most environmentally sound solution for commercial vehicles that we have seen in a long while," he said.

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