Swedish truck and bus major Scania's Indian subsidiary Scania Commercial Vehicles India Private Limited today announced the commencement of its bus manufacturing facility at Narasapura near Bengaluru.
The bus manufacturing plant's current capacity is about 1,000 units per year, and will employ 300 people in its first year.
In October 2013, Scania had inaugurated its truck manufacturing facility in Narasapura. Scania has collectively invested around Rs 300 crore in their truck and bus manufacturing facility. The current yearly capacity of the manufacturing plant is 2,500 trucks. The bus plant will also serve as an export hub for regions such as Asia, West Asia and Africa.
Over the next five years, Scania aims to double its production capacity to 2,500 units of buses and 5000 units of trucks and recruit about 800 employees by the end of 2017.
Scania aims to sell 2,500 trucks and 1,000 buses per year in the Indian market, by 2017 employ over 800 people at this facility.
The subsidiary has secured orders from state-run transport corporations in Karnataka and Maharashtra to supply luxury buses for their inter-city services and city buses for operating in their metros.
"We have orders to supply 35 luxury buses from Karnataka State Road Transport Corporation (KSRTC), 30 units from Maharashtra State Road Transport Corporation (MSRTC) and 150 coaches from private operators such as SRS Travels in Bengaluru and Golden Travels in Mumbai," Anders Grundströmer, Managing Director, Scania India said.
One sector that it aims to tap is the mining sector. Scania sees the potential in the mining sector to be around 1,000 trucks in the next few years. However, the company did not specify the time period to achieve this target.
Martin Lundstedt, President and CEO, Scania CV, said: "The Narasapura facility will serve both the Indian market and export markets in Asia. We will draw on the local talent and competence, and combine it with global experience, making all facilities part of our global network and in turn creating value across our global value chain. We see Narasapura as an important addition to our global operations and are committed to making it a success."
The plant today has 286 people on the shop floor, including 71 women.
The company could also set up a financing company like the one that the fellow Swedish major Volvo has set up to encourage those interested in buying their vehicles which was being seen prohibitively priced when compared to ones that were in the market till then.
As of now, the indigenisation on the buses is about 70 per cent and the company intends to increase the indigenisation further. It imports engine and gearbox.
The manufacturing facility in India is Scania's move to drive their global vision which includes setting up a large manufacturing establishment that the company claims is in sync with India's vision to become a manufacturing destination. "The Make in India campaign will facilitate the manufacturing sectors to grow rapidly and we will enable large-scale manufacturing activities in India and strengthen employment," Grundströmer said.