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Plans to treble export from India

Mr Eric Leblanc

K Giriprakash
V.K. Varadarajan

Bangalore, July 12 Volvo is working on a plan to have a common platform for trucks for the Asian market while it is studying the market to launch its Nissan range of trucks in India.

The Swedish truck giant has also set to target of exporting about 1,000 trucks from India in 2008, which will be nearly three times more than what it will export this calendar year. “A common platform will ensure faster deliveries as well as lower costs substantially,” the Volvo Managing Director, Mr Eric Leblanc, told Business Line. He said while some of the components such as cabins ands axles will be sourced locally, engines could be sourced out of Sweden. “To sell in higher volumes, we have to come down on costs,” he said.

Volvo, which is the largest non-Asian truck maker in the continent, is keen to increase volumes. Its share in the Asian market is less than one per cent currently. “Our ambition is to be a major player in Asia,” Mr Leblanc said.

Volvo is also considering importing CKD (completely knocked down) kits of its Nissan trucks from Japan into India. In Japan, Volvo sells its Nissan trucks as Volvo-Nissan and in other countries as UD (ultimate delivery). Last year, Volvo bought a 13 per cent stake in Nissan Diesel for about $195 million. The acquisition was carried out to help Volvo to expand its market in Asia. Over 80 per cent of Nissan Diesel’s portfolio consists of medium sized and heavy trucks. In India, it could launch products from Volvo-Nissan which do not overlap with those which are already manufactured in the country.

Mr Leblanc said Volvo expects to export about 1,000 trucks next year to China, Mynamar and also increase exports to South Korea from India. In 2007, Volvo expects to export about 250 trucks, double that of last year. He admitted that Volvo’s pricing continues to be an issue in Indian market and hence is trying to market its trucks differently.

But with the boom in the retail sector, Volvo expects that volumes could come from that sector. With retail companies purchasing vegetables from the source itself, Volvo sees a huge potential for transporting farm produce from “the countryside to the retail stores.”

Mr Leblanc said for the first five years, Volvo lost heavily in the Indian market but since then, has recovered to post profits. He said Volvo could turnaround the company because it involved itself more closely with the customers’ business.

“We worked with them as if we were their business partners. This helped their confidence grow,” he said. Volvo sold about 612 trucks in 2006 in the domestic market posting a growth of about 10 per cent.

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