Scania to invest $30 mn in India plant

Bangalore: Swedish truck maker Scania AB will invest Rs 150 crore ($30.1 million) in an assembly plant in southern India, as the company eyes surging growth in large commercial vehicle sales in Asia’s third-largest economy.

Scania’s entry into India’s truck and bus sector comes as global manufacturers such as Daimler AG and AB Volvo ramp up their presence in the country, as sales of heavy-duty vehicles soar on strong economic growth.

The company will make a further investment in 2014 in the plant which is situated outside the city of Bangalore, Henrik Fagrenius, managing director of Scania Commercial Vehicles India said, without providing further details.

“The manufacturing of complete trucks locally in the country means that we can cut lead times further and broaden our product offering,” Fagrenius said in a statement on Tuesday.

The plant will assemble truck and bus chassis and bodywork and complete the fitting out of all vehicles. It is expected to start production in early 2013.

Sales of commercial vehicles in India are expected to grow by 18-20% in the financial year that ends in March, according to an industry body, far outstripping car and motorcycle sales growth.

Swedish rival Volvo, the world’s second-largest truck maker, said this month it plans a second manufacturing plant in India, alongside an $80 million investment to increase capacity at its first plant to 2,500 vehicles per year.

Scania entered in India in 2007 by selling off-road trucks for the mining industry in partnership with Indian engineering conglomerate Larsen & Toubro Ltd.

The company’s association with Larsen would continue despite Scania’s entry alone into the on-road sector, Fagrenius said.