Europe's largest automobile company Volkswagen's commercial vehicle arm Scania on Wednesday announced its foray into the Indian market with the establishment of a regional product centre in Bangalore that will assemble heavy haulage trucks and premium intercity buses starting June 2012.
Currently, Scania does sell some of its mining vehicles to Larsen & Toubro, which is also its distributor for these vehicles in India since 2007-08.
The firm, however, now wants to function as a full fledged commercial vehicle player with a target of selling 2,000 trucks, 1,000 buses and 1,500 engines per annum by the next 5 years. In the last 3 years, Scania has sold 600 mining trucks through L&T. "We have not firmed up our investment plans and mode of operations in India yet but we do see this market along with China, as our two biggest markets in Asia over the long term," said Henrik Fagrenius, managing director, Scania Commercial Vehicles India Ltd. "We are looking at all possible options as to how we are going to spread our presence in India. The possibility of roping in a strategic local partner is not ruled out either."
Initially, the Bangalore product centre would employ 100 people and would be Scania's second largest such centre after South Africa. It has similar centres in Taiwan, Malaysia, Dubai, South Korea and Russia as well.
With a presence in over 100 countries, Scania is considered as the world's most profitable heavy truck manufacturer. Asia accounted for only 19% of the company's global vehicle deliveries in 2010 with Europe (39%) and Latin America (32%) accounting for the lion's share.