India to become center for new medium-duty engine

VECV's facility in Pithampur is home to a rapid expansion. Part of the new construction taking place is the SEK 480 M investment in the production of the Volvo Group’s new global medium-duty engine. The investment gives the Volvo Group a complete facility in India for processing and assembling the new medium-duty engine, which will be introduced in the Group’s trucks and buses worldwide in the next few years.

Through this investment, it will be possible for the Volvo Group  to locate most of its production of medium-duty engines to VECV’s plant in Pithampur. VECV has an established supplier base in India and efficient purchasing channels and already today, VECV produces about 40,000 engines per year in the existing plant. The Group will now have an engine platform that combines the latest in Japanese technology with India’s highly competitive production cost. The investment in Pithampur will result in an annual production capacity of an additional 85,000 new medium duty base engines.

At the same time, the Volvo Group will invest an additional SEK 460 M in the Group’s production plants for engines in Ageo, Japan and Venissieux, France. Through this investment, the Group will, among other things, have an annual final assembly capacity for 30,000 medium-duty base engines for the European market.

Development of the new medium-duty engine has been led by Volvo Powertrain in Ageo and the engine has been designed to meet current and future exhaust requirements in Europe, the US and Japan.

In addition to production of the base engine itself, the facility in Pithampur will also conduct final assembly of engines for India and all of Volvo Group’s global markets with Euro III and Euro IV emission requirements. Production and final assembly of the engines for the Japanese market will be in Ageo, while final assembly of the engines for the European market will take place in Venissieux.

By gathering base engine production in India, it will be possible for us to meet the Group’s need for cost-efficient medium-duty engines in Asia, while also contributing to an increase in our competitiveness in the medium-duty segment in other markets.

Production of the Group’s new medium-duty engine program started in Ageo in 2010 for the Japanese and U.S. markets. The production of medium-duty engines in Pithampur starts in 2012.