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Volvo kick-starts exports to S-E Asia

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Volvo kick-starts exports to S-E Asia

Truck maker Volvo has despatched the first lot of 150 trucks to South Korea kick-starting its exports to South-East Asia.

"We hope to continue to export to other countries as well," the Volvo India Managing Director, Mr Ulf Nordqvist, told presspersons on Thursday. Last year, Mr Nordqivst had told Business Line that India has been selected as Volvo's fourth global export hub. Sweden, Belgium and Botswana are the other three export hubs for Volvo.

Mr Nordqvist said these FM12 trucks have been exported to Volvo's Korean operations and there are no financial transactions between the Indian and the Korean entities.

In Korea, Volvo has around 10 per cent market share and sells about 1,000 trucks. The trucks have been customised to the needs of the Korean customers, Mr Nordqvist said.

"It is cost effective for Volvo to export from India which will increase the competitiveness of its products in the world market," he said. Volvo already exports buses to Bangladesh and a few trucks to Sri Lanka.

He said Volvo has taken advantage of the free trade agreement between India and other countries. It sources the components from other countries and uses India as a hub for exports. Volvo already exports auto components to other countries. In 2004, it exported about 26 million euro (about Rs 148 crore) worth of auto components and expected to export 40 million euro (about Rs 228 crore) worth of components this year.

The trucks being exported to South Korea are for haulage of construction material as well as on highways, reaching up to speeds of over 100 kmph. The Volvo FM12 tipper trucks have features such as I-shift gearbox, a 420-hp Volvo D12 engine, tubeless tyres, air suspension seats and maintenance-free suspension. The I-shift gearbox has the latest shifting system, a 12-speed non-synchromesh range and splitter gearbox with an electronically controlled shifting system. The gear shifting is fully automatic though the driver still has the option of choosing manual gear changes.

Mr Nordqvist said the company has nearly exhausted the Rs 300-crore initial investment it made when it set up the operations in India, in 1998. The company can produce up to 1,000 trucks in a single shift currently and it can ramp it up to 2,000 trucks by adding another shift without any additional investments, he said. In 2003, Volvo posted revenues of around Rs 360 crore compared with Rs 280 crore in 2002. In 2004, Volvo sold around 350 trucks, 300 buses, 200 engines and 350 construction equipment in the domestic market.

Volvo launched two new trucks towards the end of 2003, the FM 12 and FM9, which are part of the new global product portfolio, the group's biggest product overhaul in a decade, created at an investment of over Rs 2,900 crore. The new trucks are built on a new driveline and fitted with a new Volvo Euro III compliant engine.


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