Volvo to invest Rs 975 crore to expand bus and truck plant in Karnataka

by Jaishankar Jayaramiah 15 Jul 2015


Swedish truck and bus manufacturer Volvo is to invest Rs 975 crore to expand its manufacturing facility in Hoskote, near Bangalore. The company has been producing trucks and buses at this plant, which also houses a commercial vehicle driving school.

According to a statement issued by the Karnataka government on Tuesday evening, Volvo will be investing Rs 975 crore to expand its manufacturing plant that will generate job opportunities for more than 2,100 people.

The state government made this announcement after Hakan Agnevall, president, Volvo Bus Corporation, held discussions with Siddaramaiah, chief minister of Karnataka, in Bangalore. The chief minister also announced the government will allot 90 acres of additional land to Volvo to expand its Hoskote facility, which currently covers around 150 acres.

Hakan Agnevall was in Bangalore to make an announcement on Volvo India commencing bus exports to Europe. Although Agnevall did not share any of the company’s investment plans before visiting the Karnataka chief minister’s office, top officials of the company said the fresh investments are to expand the assembly line and improve supply chain management as the company is scouting for major orders from European intercity commuter segment.

According to Akash Passey, senior vice-president, Business Region International, Volvo has invested Rs 400 crore since 2011 when the company started implementing its ‘Asia Leverage’ programme in India.

In the past five years, the company has carried out various improvements in the facility with a new paint shop, full-fledged warehouse and skills development centre. The company has also set up an R&D centre to cater to Volvo’s India and global level demands.

Currently around 1,000 employees constitute the workforce at Volvo’s bus facility. They include 50 engineering professionals at the R&D centre.

The Hoskote plant has an installed production capacity of 1,500 buses per annum but it has been utilising less than half of its capacity currently due to sluggish market conditions.

Volvo has a strong association with Karnataka as it was the first European automotive major to set up a bus and truck manufacturing plant near Bangalore 16 years ago. The company first began manufacturing trucks to address growing demands in the Indian mining and construction equipment segment but eventually its buses became more popular when it introduced its luxury intercity and long- distance coach buses in the country.