Volvo Buses on Thursday said it would invest about Rs 400 crore in a new plant as well as expand its existing facility near Bangalore.
Volvo Buses Corporation President and CEO, Mr Hakan Karlsson, told newspersons that the investment would be spread across five years. He said the company expects to sell about 5,000 units every year from 2015. The company currently has revenues of around $150 million which it expects to scale it to about $1 billion in another four years. About 20 per cent of the total production would be exported.
Mr Karlsson said Volvo Buses has decided to carve out four hubs across the world, including India, to reduce currency fluctuation. “Currency fluctuation is a headache which we need to deal with firmly,” he said.
Volvo Buses was set up in India a decade ago and it has so far sold about 5,000 buses across the country in the premium segment (price ranging from Rs 70 lakh to Rs 1 crore). It plans to enter the medium segment (about Rs 50 lakh) with the setting up of the new factory and expects over 50 per cent of sales to come from this segment. The existing factory, which has a capacity of 1,000 buses, will be expanded to manufacture about 2,500 units per year.
Mr Karlsson said these investments were part of the ‘Asia Leverage' programme with a special focus on India and China. “By 2015, we expect global sales to double to about 30,000 units with half of it coming from Asian countries,” he said.
Volvo Buses India Managing Director and CEO, Mr Akash Passey, said the strike at the local plant had led a production shortfall of about 50 units. However, the strike was now over and the employees were back at work, Mr Passey said.