Volvo-Eicher Commercial Vehicles (VECV) plans to export 60 per cent of the engines that will be produced at their upcoming medium duty engine plant at Pithampur to Volvo group companies overseas.

The new plant, which will have an installed capacity to make 100,000 engines per annum, is Volvo’s largest such facility outside Europe and will go on stream by the middle of 2013. It will produce two main engine variants — the 4-cylinder, 6 L and the 6-cylinder 8 L — and be the first plant in India to begin making Euro VI compliant engines while augmenting VECV’s existing capacity for producing 60,000 engines.

“Our objective is to reach full capacity utilisation in the new plant by 2015,” G. Sekar, Sr VP, Sales and Marketing said, adding that while 60 per cent of the production will be earmarked for sale to Volvo Group companies overseas, the rest will be used in the Eicher range of trucks and buses.

The company is also investing Rs 125 crore in a new body-building facility for Eicher buses in the same vicinity that is due to become operational early next year. It will have the capacity to build 5,000 bodies in the first phase, followed by as many more in the second phase.

The plants to make engines, bus bodies as well as upgradation and augmentation of existing facilities are all part of a plan to improve its market share in India and sell 100,000 vehicles by 2015. The company expects to close the current year at 60,000 units.

“We have firmed up capital expenditure plans of Rs 1,000 crore to be spread across the board over two years. This will be in addition to Rs 700 crores incurred on capex in the last three years,” Vinod Aggarwal, CEO, VECV, said in an e-mail reply on their investment plans.

To improve penetration in the marketplace, VECV, which currently has 253 touchpoints — including three new ones in Pune — plans to add new dealerships and take this number to 300 by the year-end.

Last week, the company launched three new products — its Skyline bus, a tipper for applications in construction and mining and a 14.5-tonne Gross Vehicle Weight truck in the Pune market.

alka.k@thehindu.co.in

(This article was published on August 11, 2012)
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