VECV opens new engine plant, to be global hub for Euro 3-6 engines of Volvo group

July 31, 2013: The 50:50 joint venture between Eicher Motors and Volvo has inaugurated a new engine plant that is part of aggressive growth plans. It is part of a plan to treble its marketshare in the domestic heavy CV segment from the current level of five percent to 15 percent in about three years’ time.

This brand new plant inaugurated today will help the Volvo Group to be more competitive by sourcing engines from a low-cost base. The plant has an initial annual capacity of 25,000 units per annum and was set up at an investment of Rs 375 crore. The capacity will be increased to 100,000 units per annum at an additional investment of around Rs 125 crore. The Volvo-Eicher JV, now five years old has so invested around Rs 1,600 crore. Another Rs. 800-900 crore will be invested by end-2014.

“The plant puts us in an extremely advantageous position vis-a-vis competition on engine technology. VECV will make Euro 6-compliant base engines for meeting automotive requirements of medium-duty engines of Volvo Group globally”, says Siddhartha Lal, MD, Eicher Motors. The engine platforms manufactured here will have a power range of 180 to 350 HP. "They will provide highest power to weight ratio in the Indian commercial vehicle space,” said Vinod Aggarwal, CEO.

The engine facility will be a global hub for meeting the medium-duty automotive engine requirements of Volvo Group globally for five-and eight-litre engines. The Euro 6-compliant diesel base engines will be supplied to Volvo’s plant in Venissieux, France where they will be assembled for Volvo Group Euro 6 requirements. The same platform will be adapted to Euro 3 and 4 engine (BS3/BS4) technologies to meet the VECV needs and other Volvo Group requirements for this type of engines in Asia.

Bertil Thoren of Volvo Group said, “The engine plant will help Volvo Group reduce costs by sourcing engines from here and also enable VECV to source best in class Euro 3 and Euro 4 engines based on Volvo Group technology.

The engine plant will be followed by a bus plant. The bus body unit currently being built is expected to begin commercial production in the October-December 2013 quarter. Its initial capacity will be 7,500 units and will be scaled upto 15,000 units in the second phase.