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volvo: Volvo Group bullish on India’s growing commercial vehicle market


India is well-poised to grow manifold in the next decade and play a greater role in manufacturing operations for the Volvo Group globally, said a top executive at the Swedish maker of commercial vehicles, engines, and construction equipment.

Sofia Frandberg, on her first visit to India after taking charge as the chairperson of VE Commercial Vehicles (VECV) told ET, “We have seen huge growth across all segments we are engaged in, be it buses, trucks, engines or components…Significant investments have been made (at VECV) in technology, towards developing products, strengthening industrial capacity and in digitalization. The company is well positioned for further growth, to make in India for India, and in India, for the rest of the world.”

VE Commercial Vehicles was the fourth-largest commercial vehicle maker in the country with sales of 72,827 units in FY23. Sales for the company surged 54% last fiscal, outpacing a 34% increase in industry sales at 962,468 vehicles. The company additionally exported 4,933 vehicles last year.

VECV – a joint venture between Gurugram-based Eicher Motors and Volvo – has already become the sole global manufacturer of 5-litre and 8-litre diesel engines for the Swedish company. VECV also recently began supplying driveline parts, gears and other critical components to Volvo. Exports of components to Volvo and other OEMs totalled about Rs 400 crore in the last financial year. VECV expects robust growth in component export revenue in the future.

Vinod Aggarwal, managing director at VECV, said, “Revenues from component business have been going up significantly. As far as vehicles are concerned, our exports declined last fiscal in line with the industry due to slowdown in global markets. But our products have been received well in markets in the Middle East, South Africa and Indonesia. The potential to grow is huge (once international markets improve).”

Frandberg, also a senior leader at Volvo Group, said overall, the 15-year-old partnership with Eicher Motors has been a “win-win” and that the two companies are examining ways to further expand the alliance.“All 5- and 8-litre engines used by Volvo truck and bus brands the world over are produced here. VECV manages all commercial vehicles sold under the Eicher brand globally, and also Volvo trucks and buses business in India,” she said, adding, “We are constantly looking at further collaboration between Volvo Group and Eicher to expand the scope of the VECV partnership.”Frandberg said “the transformation” she has seen in India in the past 15 years is immense. “We are optimistic based on the fact that the Indian economy is growing fast. India is likely to become the third largest economy shortly, and the opportunities will be immense. We have everything ready (technology, products, production capacity) to play in this growing market.”

Frandberg said there are five things which will shape the future development of India – decarbonization and focus on sustainable mobility, deglobalization, digitalization, demographics and (the potential to increase) diversity. “So, as a Group, we strongly believe in India and the strength of India,” she said.


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