According to Mr. Par Ostberg, President, Trucks Asia, Volvo Group, and Chairman, VE Commercial Vehicles, this investment by VECV in its Pithampur plant gives the Volvo Group a complete facility in India for manufacturing and assembling the new medium-duty engine to be introduced in the Volvo Group’s trucks and buses worldwide over the next few years. Additionally, these engines will also be used for Eicher’s range of heavy-duty commercial vehicles.
With this investment, it will be possible for the Volvo Group to locate most of its production of medium-duty engines to VECV’s plant in Pithampur. VECV has an established and extensive supplier base in India with efficient purchasing channels and is already producing about 40,000 engines per year at the Pithampur plant. The new investment in Pithampur will result in an annual additional production capacity of 85,000 engines. In addition to production of the base engine itself, the facility in Pithampur will also conduct final assembly of engines for India and all of Volvo Group’s global markets with Euro 3 and Euro 4 emission requirements.
Mr. Siddhartha Lal, Managing Director & CEO, VE Commercial Vehicles, said: “VECV has been entrusted with building the medium-duty engine for Volvo Group’s global requirements at our facility in Pithampur. This is possibly the largest such project in India and certainly the most technologically advanced, as we will be producing base engines capable of Euro 6 emission norms. This will catapult VECV into one of the largest commercial vehicle engine manufacturers in India and will give us capability well beyond any of our competitors. The very high quality and durability requirements of the Volvo Group, such as a million km duty cycle for such an engine, will allow us to also give the Eicher brand heavy-duty customer a level of reliability and asset life that is unparalleled in India. This will be another large step towards our vision of becoming a leading CV player in India and other emerging markets by driving modernisation in commercial transportation.”
The Volvo Group is also making an additional investment of Rs. 2,766 million in Volvo Powertrain’s (VPT) production plants in Ageo, Japan, and Venissieux, France.
The new medium-duty platform comprises 5, 7 and 8-litre engines in configurations from 215 to 350 hp. The engines are based on the Volvo Group’s new PSS engines and will be manufactured to cope with emission requirements according to the Japanese PNLT, the US EPA 2010, as well as Euro 3, 4, 5 and Euro 6.
Pithampur will be the industrial base for the manufacture of medium duty base engines, capacity of 85,000 base engines per year, starting 2012. Pithampur will also do the final assembly of 55,000 engines per year. These will meet Volvo Group’s global requirements of Euro 3 and Euro 4 engines as well as VECV’s requirement of Eicher heavy-duty commercial vehicles.
Of this, 30,000 base engines will be sent from Pithampur to VPT’s plant in Venissieux, France, where these will be assembled for the Volvo Group’s Euro 5 and Euro 6 requirements, starting 2013.
Ageo has an independent capacity of 25,000 base engines and final assembly, so as to meet the Japanese PNLT requirements, starting 2010.
According to Mr. Peter Karlsten, President, Volvo Powertrain, a global manufacturing hub at VECV’s Pithampur plant is an excellent example of how the Volvo Group can leverage it global presence to reduce costs for engine manufacture while making maximum use of its industrial strength. VECV already has a robust supply chain network and, with this new development, VECV becomes integrated with the Volvo Group’s global supply chain.
Mr. Leif Johansson, CEO, Volvo Group, adds that, with the medium-duty engine platform, the Volvo Group will now have an engine platform that combines the latest in Japanese technology with India’s highly competitive production cost. Asia is an increasingly important market for the Volvo Group, with excellent growth prospects, and this investment means that it will have even better possibilities of developing products adapted for this part of the world, thereby allowing it to capitalize on this growth. By gathering base engine production in India, it will be possible to meet the group’s need for cost-efficient medium-duty engines in Asia, while also contributing to an increase in its competitiveness in the medium-duty segment in other markets.
Concurs Mr. Siddhartha Lal: “The medium-duty engine project exemplifies a perfect fit for synergies between VECV and the Volvo Group. With this development, VECV will become one of India’s largest and most technologically advanced engine manufacturers. With the production of base engines for Euro 6 requirements, VECV will be future ready for the year 2020 and beyond.”
