Volvo-Eicher JV to go ahead with Bhopal factory plan

VE Commercial Vehicles, a joint venture between Eicher Motors and Swedish truck maker Volvo, has decided to go ahead with its plan of setting up a new 40,000-units-a-year factory in Bhopal even as the Indian commercial vehicle market stares at its steepest decline in growth in a decade.

MUMBAI: VE Commercial Vehicles, a joint venture between Eicher MotorsNSE -4.92 % and Swedish truck maker Volvo, has decided to go ahead with its plan of setting up a new 40,000-units-a-year factory in Bhopal even as the Indian commercial vehicle market stares at its steepest decline in growth in a decade.
Vinod Aggarwal, managing director, VE Commercial Vehicles, told ET that the first two quarters of 2020-21 may not see a very steep decline on account of price hike.
“Dealers are defensive, financers are defensive and so are automakers. As a result, there has been hardly any pre-buy. We expect the same to continue in March. Hence, the demand should be much better in the next financial year than expected earlier,” said Aggarwal.
Sales in the 16-55 tonne truck segment plunged more than 50% yearon-year in February. In April 2019-January 2020, VE Commercial Vehicles registered a decline of more than 23% year-to-year to about 39,000 units, with a market share of 6%.
The company’s BS-IV stock has come to down to just five days and much of its production is aligned to retail demand. Aggarwal said the company is insulated from Covid-19 and has its supplies secured for March. It expects the market to rebound to low single-digit growth in the next financial year and outpace the market, said Aggarwal.
Unveiling the company’s Eutech BS-VI range of trucks in Pithampur on Wednesday, Aggarwal said that while the company is in the midst of severe cost-cutting plans and may defer some investment, it won’t stop strategic investments like expansion of the Bhopal factory, where production is set to begin from April 1.


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