Volvo plans second India manufacturing plant

Luxury bus-maker Volvo Buses India is planning a second manufacturing plant in the country even as it invests Rs 400 crore to ramp up capacity at its existing facility at Bangalore.

"We are planning to set up a second manufacturing plant. However, nothing has been finalised," Volvo Buses (South Asia) Managing Director and CEO Akash Passey told PTI on the sidelines of the Auto Expo 2012 here.

However, a source in the company said the proposed plant would have the capacity to manufacture 2,500 buses a year.

The company has already announced plans to more than double the existing capacity of its Bangalore facility to 2,500 units per year from 1,000 units a year now.

"The expansion will be completed by 2013," Passey said.

Talking about the company's sales projections, he said sales should go up by 30-40% vis-a-vis 2011 to around 1,100 units in the current year.

"The current economic condition is not good. But it also opens opportunity for us. Traditionally, we have seen that bus sales go up when the economic condition is not that good. It's because people do not opt for personal vehicles when there is a slowdown," Passey said.

Localisation for Volvo Buses India, which entered the Indian market in 2001, currently stands at 40-45%, he said, adding that this is expected to increase to 70-80% in the next three years.