Pithampur, (Madhya Pradesh), Dec. 2: Volvo Eicher Commercial Vehicles plans to invest Rs 700 crore to ramp up production at its plant here by the end of next year.
The 50:50 joint venture between Sweden’s Volvo Group and homegrown Eicher Motors, which today unveiled 11 trucks and buses under the “Pro” range, has already invested Rs 1,800 crore since 2008.
The investment of Rs 700 crore will take Volvo Eicher’s exposure to its committed amount of Rs 2,500 crore.
“Here, in Pithampur, we are ready to take the capacity to 1 lakh units per annum. At present, we are at 66,000 units per annum. So, it can be enhanced at a very small incremental value,” Volvo Eicher CEO Vinod Aggarwal said.
The company today unveiled the Pro Series, which will cover the entire 5-49 tonne gross vehicle weight range. This segment is dominated by the Tatas and Ashok Leyland.
“The increase in diesel price affects our customers a lot. However, this might help us gain market share and push sales as our products are more fuel-efficient than our competitors. We are sure that the new range will be able to challenge the duopoly in the market,” said Siddhartha Lal, managing director and chief executive officer of Eicher Motors.
According to Eicher officials, customers in India and other emerging markets are interested in modern and effective products, and rising costs are creating a heightened demand for fuel-efficient vehicles. At present, fuel costs add up to about 50 per cent of the total operational expenses of bus and truck companies. The Pro series is in a prime position to meet these requirements.
Volvo Eicher will start production of Eicher Pro Series in February 2014.