Volvo to set up component supplier base for its engine plant in India

Bangalore, November 28: Swedish commercial vehicle major Volvo is in the process of setting up a strong components supplier base in India for its upcoming engine plant in Madhya Pradesh.

This is part of Volvo’s strategy to source more components from India for its global operations. The engines manufactured in India will house a sizeable part of locally sourced components and the same will be exported to Volvo’s other vehicle manufacturing units across the world.

The engines for Volvo will be produced at the powertrain facility, which is being built by VE Commercial Vehicles (VECV), a 50:50 joint venture between Volvo Group and Eicher, at Pithampur in Madhya Pradesh.

Talking to Autocar Professional, Vinod Aggarwal, chief executive officer of VECV (pictured), said: “When we are making engines here. We should have a component supplier base. Engines will be a major area where we will have a major localisation.”

Olof Persson, president and chief executive officer of Volvo Group, while making an announcement on investments in India a week ago in Bangalore, said, “When we are having major operations in India, localisation is important. We are working and we have been working on this before. Now together with Eicher, we can accelerate the process of finding a supplier base.” But he declined to provide details over the percentage of localisation in the engines to be manufactured in the country.

He said the engine plant, which will have a capacity to produce 100,000 units of engines per annum, will be capable of exporting 30 percent of its production to Volvo’s other vehicle assembly units across the world by 2016.

According to sources close to the development, VECV has already initiated talks with various auto component manufacturers in Karnataka and northern parts of the country to source components for its engines to be manufactured in the upcoming Pithampur plant.

The upcoming powertrain facility will be a global hub for meeting the requirements of Volvo for medium duty automotive engines in the category of five-and eight-litre engines. The Euro 6-complaint diesel based engines to be produced at the Pithampur plant will be supplied to Volvo Europe and the same platform will be adapted to Euro 3 and 4 engine technologies for VECV requirements.

The engine assembly plant will have 39 percent automation level. Currently the plant construction work is underway. The installation of complete equipments in the plant is scheduled to complete in December 2012 and the production is expected to commence from July next year.

JAISHANKAR JAYARAMIAH