Volvo to buy truck parts from India
Volvo exported truck components worth 50 mn euros to the Volvo in 2005, and expects to reach 70 mn euros this year.india Updated: Jun 30, 2006 11:59 IST
Swedish truck and bus maker Volvo said on Friday it will buy more components from India and that it expects the country's improving infrastructure to boost demand for its trucks.
Volvo, which has been in India since 1998, exported truck components worth 50 million euros to the Volvo group in 2005, and expects to reach 70 million euros ($56 million) this year.
Expanding traffic and rules on over-loading would encourage demand growth and the company had seen 16 per cent sales growth in the first five months of 2006, Volvo India Managing Director Eric Leblanc said at the launch of a new line of trucks.
"We see the high-performance segment expanding quickly on the stricter emission and safety rules, as well as improving infrastructure," he said.
Volvo's factory in Hoskote, near Bangalore, has an annual capacity of 1,200 trucks and buses. It sold 400 buses and 600 trucks in India last year.
The company would add more shifts when demand increased, Leblanc said.
Volvo's city buses were launched in Bangalore in January.
The market for these buses is estimated at about 10,000 units a year and expected to rise as domestic travel picks up.
Volvo, which has invested about Rs 3 billion ($65 million) in India so far, also exports buses to neighbouring Sri Lanka and Bangladesh, and trucks to South Korea. It also hoped to expand to other markets, Leblanc said.
India's $5-billion truck and bus market, the world's fifth-largest, is dominated by leader Tata Motors Ltd and Ashok Leyland .
There are new entrants: Force Motors has a joint venture with Germany's MAN AG to make heavy trucks, while Mahindra & Mahindra has a joint venture with a unit of Navistar Inc. to make medium and heavy trucks.
Korea's Hyundai Motor Co is also looking to enter the market.
Volvo in February opened a technology and product development centre in Bangalore and said it would step up sourcing of services from India as its business in Asia expanded.