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Volvo, Eicher to invest Rs 500 crore to double CV production capacity Print E-mail
Written by Ganesh   
Wednesday, 17 November 2010
VECV and Royal Enfield in expansion mode.

New Delhi: Volvo Group and Eicher Motors Ltd will invest Rs. 500 crore to double the commercial vehicle production capacity to 8,000 units per month in the next three years. Both companies will also invest nearly Rs 300 crore to set up a medium duty engine plant at Pithampur.

Volvo has developed a new engine for its joint venture Volvo-Eicher at Pithampur. This is a completely new engine designed by Volvo, Europe and will be available in both 4 and 6 cylinder options. After the initial prototype builds of the engine it to be shipped to Volvo, Europe for testing.

VECV, Pithampur is investing close to 300 crores in world class machining and assembly facilities for this at Pithampur. The plant is expected to be operational by 2013 with an initial capacity of 85,000 units per year. The volumes are to be ramped up in a phased manner to more than 1 lac units per year by 2015. These state of the art engines will be very fuel efficient and VECV hopes this will take them to a different level of competitiveness in the Indian market. The engine is expected to hit the Indian markets by 2011/2012.

VECV is expected to launch a 25-tonne tipper truck and a rear-engine low-floor bus by April 2011.

Royal Enfield, the two-wheeler arm of Eicher Motors, is also set to ramp up it's production capacity and is planning to set up a new facility.

Currently Royal Enfield's plant at Thiruvottiyur in Chennai is capable of producing 5,000 units per month. This number will go up to 6,000 units per month by early next year. It's annual production can be pushed to 70,000 bikes a year. The location and investment plans are yet to be finalized. However the new plant will most possibly come up in the vicinity of the existing plant at Thiruvottiyur.

The capacity expansion of Royal Enfield is expected to reduce the waiting periods for the motorcycle models.

The investments will be funded through internal accruals.

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