Speaking on the occasion, Karnataka chief minister JH Patel said the launch of the facility will harbour an inflow of other automative majors into the state. Patel urged the union commerce minister to help the state with early clearances for key projects like the international airport at Devanhalli, the Cogentrix power project and the Nagarjuna project.

The vehicle will cost Rs 22 lakhs onwards. The project is part of the Volvo's first phase of investment of $60 million in the country. Volvo Truck Corporation president and CEO Karl-Erling Trogen said, "Volvo is planning to increase its investment in India to $80 million by the end of the year. The base capacity of the plant at Hoskote is 4,000 trucks per annum. During the first year of operation,the company has booked 50 orders and plans to manufacture only a few hundred trucks."

Trogen said Volvo will continue to invest in the country as the need arises since plans are already underway to manufacture buses and construction equipment at the same site.

Volvo India has indigenised its trucks to the extent of 40 per cent and has lined up at least 50 vendors for various components. 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 chasis springs and Kalyani Forge for front axles.

Some of Volvo's suppliers in Europe that will also supply components to Volvo India include Sickle and Sachs for clutches and ZF India for steerings. The company is also sourcing propellor shafts, shock absorbers and cabin components from Indian manufacturers.

Trogen said six Indian companies have been identified as suppliers for Volvo Truck Corporation's worldwide operations. However, he was unwilling to revealthe names of the companies.

Volvo has already received orders from Transport Corporation of India, Katarias, Container Way International and several other transport companies in the country. Volvo India managing director Ravi Uppal said 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. Volvo International and Europe Division president Nils Arther said the company is also offering self financing schemes for its trucks.

Talks are at an advanced stage with several leading banks and non bank finance companies for this purpose.