The Hindu : Business : Volvo joint venture to start production by year-end

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Saturday, Jun 23, 2007
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Volvo joint venture to start production by year-end

Special Correspondent

To increase the number of assembly line workers

Local sourcing of components to be increased
Talks on with public transport authorities

BANGALORE: The joint venture between Volvo India and an Indian body building firm Jaico Automobiles (Azad Group) will start production of finished buses by the end of 2007, Eric Leblanc, Managing Director, Volvo India, told reporters here on Friday. “No additional investment will be needed but we have to increase the number of assembly line workers,” he added.

Volvo has a 70 per cent stake in the joint venture, initially building 1,000 bus bodies annually, half for the export market that will include countries like Indonesia, Myanmar and Vietnam where the Swedish company is already exporting its bus and truck chassis.

About the domestic market for luxury buses, Mr, Leblanc said, “It is niche market and still developing. We have to face competition from low-fare airlines; the major improvement of highways may create a demand from private coach operators.” Limited numbers of the Volvo city bus variants had been sold in Pune and a deal with public transport authorities in Chennai was on, he said. Sales of bus chassis within India were 350 units in 2006. The 30 per cent local sourcing of some components might gradually increase.

The current production capacity of 1,200 bus and trucks near Bangalore would grow to 2,500 units in 2008, looking at the market demand here, Mr. Leblanc said.

Volvo’s global acquisition of construction equipment major Ingersoll-Rand would extend to India where the latter had close to 50 per cent market share and $40 million in sales last fiscal. The added strength would meet the demand from the growing construction sector, he said.

Mr. Leblanc earlier handed over the keys to the 200th tipper ordered by Chennai-based VPR and Co.,

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