INDIA: Volvo will use new plant as export hub
Volvo AB will eventually export 30% of capacity at its Indian engine plant, due to open next year, as the truckmaker looks to leverage cost efficiencies from its operations in the country.
Volvo will also increase the annual capacity of the plant by 25% from 80,000 engines by 2016, CEO Olof Persson told reporters in Bangalore.
He said: "The long-term capacity of the engine factory is 100,000 engines and around 30% of that is going out of India into Europe."
Volvo, which operates in India alongside local partner Eicher Motors, joins a growing list of global vehicle makers seeking to use India as a manufacturing hub for parts and components to reduce costs and as an export base to other emerging markets.
Persson added that Volvo will work with Eicher to accelerate local content in the engines produced at the plant in Pithampur, central India.
Volvo AB’s plants in Europe were operating at less than full capacity, the company said last month, and it forecast no truck market growth in the region or in the US next year.
The company, which makes trucks under the Renault, Mack, UD Trucks and Eicher brands as well as its own name, said last month that operating profit for the quarter to September halved from a year previously, as new orders during the period fell 25%.