VE Commercial Vehicles (VCEV), a joint venture between Swedish automaker Volvo and Indian firm Eicher Motors has commenced production at its new engine manufacturing plant at Pithampur, Madhya Pradesh, India.
Set up with an investment of INR3.75bn ($61m), the facility will have an initial capacity of 25,000 units per year, while it would be increased to 100,000 units annually in future.
The facility will be a global hub for delivering about 30,000 units of Euro 6-compliant five- and eight-litre medium-duty automotive engines to Volvo's Venissieux facility in France and they will be assembled for the Swedish firm's Euro 6 requirements.
The joint venture will adopt the same platform to Euro 3 and 4 engine (BS3/BS4) technologies to comply with VECV and other Volvo Group requirements for this type of engines in Asia.
Eicher Motors MD and CEO Siddhartha Lal said: "VECV will be manufacturing Euro VI compliant base engines for meeting automotive requirements of medium duty engines of Volvo Group globally."
Based on Volvo Group global manufacturing systems and processes, the new plant has passed the global quality standards of Volvo Group and is now capable of producing highest quality engines complying with Volvo Group global standards for Euro 6 engines.
VCEV claims that plant will be the first of its kind to have flexible final engine assembly line by means of automatic guided vehicles and smart cell technology.
VE Commercial Vehicles CEO Vinod Aggarwal said these engine platforms have a power range of 180 to 350HP which will provide highest power to weight ratio in the Indian commercial vehicle space.
"The engines based on Volvo Group technology are extremely durable and reliable and will create tremendous competitive edge for VECV," Aggarwal said.
VCEV is also planning to invest about INR10bn ($164m) in India by the end of 2014, bringing the overall investment in the country to INR25bn ($411m) since 2008.
The amount will be spent on several projects including a new bus manufacturing plant and expansion of existing truck manufacturing plant.
