Volkswagen Group: Scania Commercial Vehicles India makes Rs 150 crore investment
Scania Commercial Vehicles India is what we’ll refer to the company as from now on but they have been operating in the country since 2007. At that time, the Swedish commercial vehicle makers partnered with Larsen & Toubro (L&T). Scania made an investment related announcement to the tune of Rs 150 crore ($30.1 million) to set up a manufacturing facility in India in a year’s time.
The proposed Narasapura Industrial Area (Bangalore) plant would be responsible for production of 1,000 inter-city buses and coaches, and 2,000 heavy haulage trucks and over the next 5 year period. Henrik Fagrenius, Scania Managing Director had this to say. “This investment furthers Scania’s commitment to the Indian market and this is the right moment for us… This unit will enable us to shorten our lead times and enhance service levels to our customers. ” “Scania foresees a number of benefits with establishing the new plant… This will also go a long way in sourcing of components locally from India. ” “The manufacturing of complete trucks locally in the country means that we can cut lead times further and broaden our product offering. Our service to customers will also be improved by having a parts depot in the country.”
He further added, “There is increasing demand for vehicles and engines of the quality and performance delivered by Scania, together with services that guarantee customers high uptime and low operating cost. We will concentrate on broadening our existing offering of trucks to the mining industry but also in other areas of the construction segment, as well as trucks for heavy special-purpose road transport. In the bus segment we see potential for sales of buses and coaches, both for city traffic and long-distance intercity services.”
Estimates see the Indian commercial vehicles segment record an 8-10% growth rate in 2012, which gives this segment a positive outlook. The first truck from Scania Commercial Vehicles India will be rolled out in 2013. Details regarding component sourcing plans haven’t yet been divulged. Phase I of operations will see plant function as a completely knocked down (CKD) assembly unit for truck and bus chassis’. On a later date, bus body-building and service workshops for trucks and buses at the facility will be operational. The plant will be responsible for bodywork and outfitting of trucks and buses, and there will be a parts depot in India. When the Bangalore Scania Commercial Vehicles India plant is fully operational, employment for up to 800 people is foreseen in the next 5 years.
The Volkswagen Group owns a 70.94% voting stake (equity) in the truck manufacturer Scania, making VW AG Scania’s biggest shareholder. Scania Commercial Vehicles India also looks forward to selling engines to vehicle manufacturers in the country. The company had this to say. “Scania is also preparing to sell engines to its OEM customers. These engines are more compact, resulting in lesser fuel consumption, leading to lower emissions. ” “Scania’s direct presence will further boost the company’s sales, service, greater variety of models sold and shorter availability time. ” In India, Scania currently operates via sales and service points through L&T. The latter has till date distributed over 600 Scania heavy trucks in the country and this association will be continued.