Volvo to set up Engine Plant

Volvo Eicher Commercial Vehicles will invest SEK 480 M or Rs. 280 crores in the production of the Volvo Group’s new global medium-duty engine in India. The investment gives the Volvo Group a complete facility in India for processing and assembling the new medium-duty engine, which will be introduced in the Group’s trucks and buses worldwide in the next few years.

Through this investment, Volvo Group will produce most of its medium-duty engines at VECV’s plant in Pithampur. VECV has an established supplier base in India and efficient purchasing channels and already today, VECV produces about 40,000 engines per year in the existing plant. The investment in Pithampur will result in an annual production capacity of an additional 85,000 new medium duty base engines.

“Thanks to the joint venture company with Eicher Motors, we have access to a well-established production and supplier base in India,” says Volvo CEO Leif Johansson. “The Group will now have an engine platform that combines the latest in Japanese technology with India’s highly competitive production cost.”

At the same time, the Volvo Group will invest an additional SEK 460 M in the Group’s production plants for engines in Ageo, Japan and Venissieux in France. Through this investment, the Group will, among other things, have an annual final assembly capacity for 30,000 medium-duty base engines for the European market.