Swedish automaker A B Volvo has temporarily shelved its plan to make India an production base for exports to major Asian countries. The company will, instead, concentrate on the Indian market where it believes there is a substantial demand for heavy-duty trucks, which it makes.
Volvo India Ltd, the group's Indian subsidiary, has invested about Rs 300 crore in manufacturing facilities at Hoskote in Karnataka, The company wants to consolidate its position in the domestic market before venturing into exports.
Volvo foresees substantial demand for heavy-duty vehicles from major manufacturing industries. Its discussions with potential users of heavy trucks were described by company officials as encouraging.
The company will start making truck engines in India only when it achieves the required sales volume in the domestic market. At least 3,000 units, including commercial vehicles and construction equipment, are required to be sold every year for the manufacturing facility to be viable, says Volvo India managing director Ravi Uppal.
The company is optimistic of achieving this target in a few years. At present, it imports the engines from the parent company in Sweden. Its trucks have 40 per cent indigenous content.
Volvo sells two models in India, the FH12, introduced in June 1998, and the FL7, introduced in early February.
The FH12 is a six-axle tractor-trailer meant for heavy loads up to 31 tonnes. The FL7 is a two-axle truck, and is meant mainly as a carrier of containers and bulk tanks. The company has sold some 100 vehicles in its six months of operation in India. It has a sales target of 25 to 30 trucks every month.
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