NEW DELHI, January 18: Volvo Truck Corporation, a division of the $ 20 billion AB Volvo, has drawn up plans to develop India as a global base for its requirement of truck components. It will also be developing India as the hub for its truck manufacturing in Asia.``The Indian component industry has has both the prerequisites. It has the required competence and also the cost-competitiveness. What I have seen of the industry is extremely encouraging. In 10-15 years, I don't see why India can't become our global components base,'' president & CEO of Volvo Truck Corporation, Karl-Erling Trogen said.
``We expect Indian components to make our international trucks very cost-competitive. We are also keen on indigenising our production here,'' he added. Various components manufactured in India are currently being tested for quality and durability in Volvo's test laboratories.
On the manufacturing front, Volvo plans to pump in $ 300 million over the next few years into its wholly-owned subsidiary -- Volvo India
Pvt Ltd. ``Though we have a joint venture plant in China, we are looking at India as the export base for Asia, he added.
``We don't expect to export trucks from India to the America or Europe. But there is tremendous potential within Asia,'' he added as an afterthought.``We will go step by step, but are not worried about investing in India. We are prepared to pump in the required funds,'' he said. Trogen, however, ruled out the possibility of the Indian subsidiary offloading or privately placing equity shares. ``As a policy, we don't dilute our holding in any of our core areas,'' he said.
Volvo India will set up its own facilities even in areas like dealerships and service points. ``We don't want to compromise on quality. We will maintain our own sales and service outlets to set a standard, before we think about franchising them,'' he said. Trogen expects that it will take our three years for Volvo India to appoint outsiders as dealers.
Volvo India is also confident of being able to participate in the
development of a modern mass transit system in Bangalore.
The conclusions of a pre-study conducted by the company have been positive. it has now decided to conduct a full-fledged feasibility study during the spring of 1998.
``Just like trucks and goods transport are vital for the growth of the economy, passenger transport is equally important,'' Trogen felt.
Will Volvo, Renault merge?
NEW DELHI: The European trucking industry is pregnant with speculation about a possible strategic alliance or may be even a merger between Volvo and Renault. When asked if Volvo was considering a tie-up with Renault, president and CEO of Volvo Truck Corporation, Karl-Erling Trogen declined to comment. He however said that Volvo will take an active part in the global consolidation and restructuring of the truck industry.
``As product life cycles shrink, development costs have to be spread over lower volumes. Economies of scale, then become extremely important. This will trigger a restructuring of the industry,''
Trogen felt. ``Volvo will have an active role to play in this process,'' he said.
``About six months ago we struck up an alliance with Mitsubishi Motors for joint development of the next generation of medium and heavy trucks,'' Trogen pointed out. Volvo also has a distribution agreement with General Motors in north America. ``In the future more such joint ventures, alliances and mergers will happen,'' he predicted. ``Volvo will play an active role in the process,'' he added.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
