Volvo may go for new plant next year

Chennai: With a turnaround in the truck and bus industry, Volvo Eicher Commercial Vehicles (VECV) is looking at a new plant next year if the current peak production trend continues. According to company officials, VECV is currently hitting 7,000 units per month which is its peak capacity. If this demand trend continues, the company will start scouting for a new plant next financial year.

"Last month we did around 6,000 units plus and this month onwards we are looking at 7,000 units per month which is our peak capacity. We are focussing more on production because demand has been positive across all segments. We expect to hit full capacity all through this quarter. If this trend continues we will have to look at capacity addition in the form of a new plant next year," said Volvo Eicher Commercial Vehicles (VECV) MD Vinod Aggarwal.

VECV reported a 49.5% increase in total sales at 6,087 units in December. The company, a joint venture between Volvo Group and Eicher Motors, had sold 4,071 units in December 2016.

VECV will invest around Rs 400-500 crore this year in capex — same as in the past couple of years. "Most of the investments will be in migrating to BS6," said Aggarwal. The company is also investing in its own electric vehicle range starting with a 9 metre, 34-seater medium range bus which it is currently piloting. "We will begin the electric vehicle range with buses because that's a better entry point for this technology. We are working on more electric models for our range," he added. Although VECV has Volvo as a partner and has access to Volvo's technology platform, the electric bus has been made in partnership with Pune-based KPIT Technologies.

VECV's electric bus foray is among a number of similar product developments by rival commercial vehicle majors Tata Motors and Ashok Leyland. Sources say a number of variants of the basic e-bus platform may follow and VECV is looking at within-the-city applications.

Volvo India