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K. Giriprakash
V.K. Varadarajan

Bangalore , March 10

VOLVO has selected India as its fourth global export hub and plans to outsource more development work to the country.

The country has also worked out a new marketing strategy for India to increase its market share in the country.

"We should start exporting trucks from India this year itself," Mr Ulf Nordqvist, Managing Director, Volvo India, told Business Line.

Sweden, Belgium and Botswana are the other three export hubs for Volvo.

Mr Nordqvist said that Volvo would also take advantage of the free trade agreement between India and other countries.

It will source the components from other countries and use India as a hub for exports.

Volvo also plans to outsource more software development work to India from other countries. It has a tie-up with MindTree Consulting in India for development work.

Mr Nordqvist said that the company expects to export 23-million-euro worth of auto components from India, compared to 14-million-euro worth in 2003.

Volvo has devised a new marketing strategy for the country, which includes splitting the entire truck market into separate segments and focusing on each of them to gain market share.

For instance, separate marketing strategies will be evolved for sectors such as mining and tractor-trailer applications.

The truck maker already has a 65 per cent share in the high-end truck segment.

Volvo has nearly exhausted the Rs 300-crore initial investment it made when it set up the operations in India in 1998. "We could make some small investments soon."

The company can produce up to 1,000 trucks in a single shift currently and can ramp it up to 2,000 trucks by adding another shift without any additional investment, Mr Nordqvist said.

In 2003, Volvo posted revenues of around Rs 360 crore compared to Rs 280 crore in 2002.

Till 2003, it has sold 1,700 trucks, 300 buses and 600 units of excavators, articulated haulers, etc. "We expect to have more than double-digit growth during the year," said Mr Nordqvist.

He admitted that Volvo fell short of targets it had set for itself when it started operations in the country. "In India, we need to be more cautious while making projections."

Volvo launched two new trucks towards the end of last year, 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.

They are built on a new driveline and fitted with a new Volvo Euro III compliant engine.

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