Escape route

Hyderabad, March 13: After Volkswagen, it’s the turn of Volvo to drive away from Andhra Pradesh.

Sweden-based bus manufacturer Volvo has opted for Bangalore to set up its proposed bus body manufacturing unit instead of Andhra Pradesh, which had offered the company sops for setting up the unit in Chittoor district.

Volvo had evinced interest in setting up a unit near Chittoor after a meeting with transport minister Kanna Lakshminarayana and the then managing director of APSRTC M.V. Krishna Rao.

“Volvo gave up the idea as Bangalore already has a strong infrastructure in bus body manufacturing,” the minister said today.

Volvo was earlier outsourcing the body building in India to a Bangalore-based company, Jaico Automobiles (Azad group). While engine parts and chasis are manufactured in Sweden, the bus body was built in the outsourcing unit.

However, there were some complaints about defects in structural design and defective air-conditioning in the buses. Following the complaints, the company decided to set up its own bus body building unit in the country.

Volvo officials had come to Hyderabad a few months ago and held negotiations with the state government to set up shop in Chittoor district in view of its proximity to the ancillary industry in Chennai which was hardly 100 km from Tirupati.

Andhra Pradesh had also lost the Ford and Mahindra proposals to set up manufacturing units in the state for lack of infrastructure in the past.

“However we are keenly pursing a project with the MLR group of industries to set up a car and LCV unit in Hyderabad, the minister said.

Last week, the state cabinet sanctioned 475 acres to the MLR industries to set up its car unit in collaboration with an Italian car manufacturer. The project is financed and supported by former Hyundai managing director B.V.R. Subbu.