Volvo draws up forgings hub plan

Volvo, one of the largest heavy vehicle manufacturers in the world, plans to develop India as the sourcing hub for forging and casting components.

The company is already exporting huge quantities of forging and casting components to its other operations in Europe.

Eric Leblanc, managing director, Volvo India, said the company was exporting auto components from India to its European and other operations and 75 per cent of that is casting and forging materials.

He was in Kolkata for the launch of new Volvo FH and FM in the eastern region.

According to him, the export of auto components from India by Volvo had witnessed 40 per cent growth in the current year.

"We have exported euro50 million(about Rs 3 billion) worth of auto components in 2005. This year we have already exported euro70 million (about Rs 4.1 billion) worth of auto components. Forging and castings is the biggest chunk

in this. In fact it makes sense for us to source such materials from India," he said.

Volvo was also looking at increasing the level of localisation in India once the volume permits, Leblanc said.

"Now we are manufacturing 1,200 bus and trucks at our facility near Bangalore. We need a volume of around 5,000-5,500 to further increase the level of localisation," he said.

The level of localisation of its bus manufactured in Bangalore was around 20 per cent and 30 per cent for trucks, Leblanc said.

He also indicated the company could increase its production at its Bangalore plant in the next two years.

"We are now working in one shift. If we start working in two shifts then the capacity of 1,200 could be doubled," he added.

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