Volvo plans to invest up to INR7 billion (USD111.1 million) in its Indian operations over the next five years, reports the Press Trust of India, citing a senior company executive. "Our capital expenditure is always spread over a period of 3–4 years. So, we have already invested close to INR10 billion over the last one decade. There is a plan to invest INR5 billion–7 billion in the next five years," said Kamal Bali, Volvo India's managing director. Although the executive did not reveal further details about the investment programme, he said the majority of the funds would go towards capacity expansion and the introduction of new products.
Significance: The Swedish automotive group is present in India through a joint venture (JV) with Eicher Motors. The equal-stake JV sells Eicher and Volvo commercial vehicles, while the Swedish company sells its luxury buses through a separate network. The company makes premium trucks, buses, and construction equipment at its three Indian manufacturing sites in Bangalore in the state of Karnataka. Volvo is by far the most successful company in India in terms of supplying premium buses to various state transport authorities. Its success has attracted competition, including from Mercedes-Benz and Scania. In light of this growing competition, especially in the luxury bus segment, it is natural that Scania is considering expanding capacity. According to IHS Automotive estimates, Scania's bus sales stood at nearly 900 units in India last year. However, this is expected to grow to 1,600 units in 2017 and to more than 2,700 units in 2020.
