Swedish auto giant Volvo Group expects its businesses in India to grow by double digits over the next few years, while its R&D operations in the country are expected to play a significant role in the group’s global net-zero journey.

In India, Volvo is the most well-known brand in the premium truck market, with a leadership position in the segment. It has a successful joint venture (VE Commercial Vehicles) with Eicher Motors for mass-market trucks and buses. Its other businesses include construction equipment, Penta engines for industrial applications and a financial services arm. It runs three factories near Bengaluru for Volvo Trucks, Volvo Buses, and Volvo Construction Equipment.

Volvo Group and its Indian operations grew significantly during 2016-2019. The Indian operations’ profitability and revenue also grew during this period. While there was a decline in 2020 due to the pandemic, most businesses could come back to pre-pandemic levels in 2021.

“Barring buses, all our other businesses are back to pre-pandemic levels. Trucks are doing very well, while the construction equipment business is doing better than pre-pandemic levels. Our Penta engines and financial services businesses are also doing well. Overall, we are seeing fairly good traction going forward, though there will be some temporary headwinds such as inflationary pressures and high commodity prices on account of the Ukraine war,” Kamal Bali, President and Managing Director, Volvo Group India, told BusinessLine.

Impressive Infra story

He said that massive spending on infrastructure development by the Indian government would augur well for the group’s businesses to record strong growth going forward.

“There is an impressive infrastructure story in India. This story has never been so good. Most companies, including Volvo Group, connected to the infrastructure sector should grow in double-digits. Even though our economy grows at 7-8 per cent, and if you add inflation of 4-5 per cent, there should be a natural growth of 12-13 per cent easily. If you don’t grow at this rate, you will lose market share,” said Bali.

The group’s total revenue in India is estimated at more than ₹15,000 crore.

Net-zero emission goal

While its businesses see a bullish growth outlook, the company’s massive R&D operations in Bengaluru are expected to aid the group’s transition to net-zero emissions.

“Indian R&D operations will be playing a big role in the net-zero journey of Volvo Group. The Bengaluru Centre is the second largest R&D centre for the group after Sweden. About 2000 engineers at the R&D centre are working on innovative future technologies, including electromobility, alternate fuels, connectivity solutions, autonomous solutions, etc., said Bali.

Volvo Group seeks to achieve net-zero emissions by 2040. By 2030, the group expects 50 per cent of Volvo trucks in Europe to be working on non-fossil fuels. Each country’s operations will be taking a different path to cut emissions.

Green castings

Its emission journey in India has started with sourcing what it calls “green castings” for its global engines. The manufacture of green castings (produced by Brakes India) will involve eliminating toxic chemicals and elements and using minimal resources, where products can be recycled and reused and come with eco-friendly packaging.

About four years ago, only 3 per cent of the global emissions were being addressed by countries and companies across the world. Today, almost 92 nations have come together to handle nearly 80 per cent of the net-zero journey. “Sustainability is key for future growth and survival,” he added.

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