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Volvo to increase sourcing components

K. Giriprakash

India is single sourcing base for Volvo tippers sold in Korea

Bangalore , April 26

Volvo will increase sourcing auto components from India by nearly 40 per cent to around 70 million euros this year, even as it has become a single sourcing unit for a truck model sold in South Korea.

The company's head for global sourcing, Mr Emmanuel Jupep, told Business Line that the component sourcing from India was increasing steadily. Two years ago, component sourcing from India was just over 20 million euros. Globally, it sources over $10 billion worth of components from various countries. Some of the components it sources out of India include machine and painted castings, forgings, gearbox and engine components.

Sources in Volvo said early 2005 that the company supplied a batch of 150 tippers (FM12 8 X 4 - 420 HP) to South Korea. Following its success in exporting the tippers to South Korea, India has now become a single sourcing base for all such tippers being sold in South Korea. The company's product development unit, 3P (production, purchase and planning) is already focusing on building India as a base for truck development aimed at supporting strategic expansion in Asia. Volvo has sold over a 1,000 tippers in India. About 70 per cent of last year's sales have come from repeat purchase.

Sources said that in terms of volume, the company has recorded a 65 per cent increase in 2005 compared to the previous year. In 2005, it sold around 600 trucks of various sizes. Though they did not give details about its total turnover in 2005, sources said the truck giant recorded an increase in turnover of between 50 per cent and 100 per cent in all its four divisions and two business units. During 2004, the company's turnover in India was around Rs 600 crore.

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