Date:11/08/2006 URL: http://www.thehindubusinessline.com/2006/08/11/stories/2006081104570300.htm

Back Volvo India to increase capacity utilisation

Our Bureau

Market growing by about 30%

Kolkata , Aug. 10

Even as Volvo India's manufacturing facility at Hoskote, Karnataka, operates at full capacity on single-shift basis, the company estimates that operations on double-shift basis may have to commence within the next two years.

To meet the immediate growth in demand for its high-performance trucks and buses, the company would prefer to enhance productivity within the ambit of the existing single-shift operations, Mr Eric Leblanc, Managing Director of Volvo India Pvt Ltd, told a news conference here on Thursday to announce the launch of the New Volvo FH and FM high-performance trucks in Eastern India.

"We have a capacity to manufacture 1,200 trucks and buses annually and are operating at near-100 per cent capacity utilisation. We can contemplate double-shift operations sometime during the next two years. To meet the immediate growth in demand for our offerings, we can enhance capacity utilisation by another 10-15 per cent," Mr Leblanc said.

High-end trucks

He said the company was present in the high-end, high-performance trucks and buses segment only. With India moving into high-performance trucks, the addressable market for the company was growing by about 30 per cent annually. Volvo trucks were popular in sectors like mining, heavy goods transportation and applications demanding high-safety and heavy haulage.

Of the 600 heavy-duty trucks that Volvo India sells annually, 400 are sold to the mining sector. In addition, the company sells 400 buses every year even as another 130-150 trucks and buses are exported to Korea, Sri Lanka and Bangladesh every year.

Mr Leblanc said a total of Rs 300 crore was invested in Volvo India since commencement of its operations in India in 1998.

Volvo trucks are priced in the Rs 28-65 lakh range even as buses sold by the company are priced at Rs 60-70 lakh each. The company has achieved 30 per cent localisation content with regard to trucks and 20 per cent in respect of buses. Local vendors were being encouraged even as the idea was to develop India as an export base for forgings and castings. Earnings from export of forgings and castings would be around 70-80 million in 2006, Mr Mansoor Ahmed, Vice-President (Marketing) of Volvo India, said.