Bangalore, Mar 12: Volvo India has tied up with several local companies to source components and parts for its trucks, which will be manufactured at the company's plant in Hoskote, near Bangalore.Volvo India Ltd managing director Ravi Uppal told The Financial Express that, "We have tied up with several companies that are already our suppliers in Europe and have set up shop in India. Some of the other alliances are with major local companies whose products have met without specifications."
Among Volvo's suppliers are Wheels India, Brakes India, Sundaram Fasteners, and Sundaram Clayton. The company has also tied up with Jai Parabolics Springs for chassis springs and Kalyani Forge for front axles.
Some of Volvo's suppliers in Europe who will also supply components to the firm include Sickle & Sachs for clutches and ZF India for steerings.
"We are planning to indigenise 35 to 40 per cent of our production which commences in June 1998 and within the next five years over 65 per cent of our product will be Indian." The company is also sourcing propeller shafts, shock absorbers and cabin components from local manufacturers.
Uppal said, "Though our plant near Bangalore has the capacity to manufacture around 4,000 trucks per annum, we will manufacture only a few hundred trucks for the second half of 1998, depending on the order position in June."
``We are hoping to break even within the next two years and record returns on our investment by the year 2000'', he added. Volvo has already received orders from Transport Corporation of India, Katarias, Container Way International and several other major transport companies in the country. A driving school has also be set up at the company's premises near Bangalore and training is being imparted to two drivers for every truck purchased.
Uppal said the organised transport sector, which is Volvo's first target, is catering to over 30 per cent of the demand in the country. The unorganised sector will be tackled through direct marketing with help of field officers.
Volvo is also offering self financing schemes for its trucks. Talks are on with several leading banks and non-banking finance companies (NBFCs) for the purpose.
Future plans include the manufacture of buses, earthmoving equipment, mining equipment and multi-purpose commercial vehicles. The company's manufacturing facility is being set up at a cost of Rs 300 crore.
It has an equity base of $60 million which will be increased to $80million within the next two years as the company's operations widen.
The company is at present likely to concentrate its activities in the southern, western and northern parts of the countries where it has set up service stations, Uppal said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
