11 Months agoThis article is part of the ‘Listening to the Leaders’ series that explores the vision of a business leader, and the crucial role ‘Make in India’ initiative plays for their business to grow.
OVERVIEW OF THE COMPANY
Volvo India Private Limited has been operating in the country since 1998 as a fully-owned subsidiary of Volvo, Sweden. Founded in Sweden in 1927, it has become a global company with operations in over 20 countries, and nearly 90% of its revenue is coming from international operations.
The company launched its first truck model, FH12, in the Indian market in 1998 and its first bus model, Volvo B7R, in 2001. The company has a manufacturing plant in Bengaluru, where it assembles heavy commercial vehicles. It was set up with an investment of about USD 70 million and expanded its operations with a new value truck in 2014. The company also established a Volvo bus factory in 2008 and had expanded its footprint by 100% in 2013.1 However, even before the trucks commenced production, Volvo had already begun its sales operations with the Volvo Penta and Volvo Construction Equipment business units.2
Volvo currently has manufacturing setups in Hosakote, Peenya, Bengaluru, and Pithambar in Madhya Pradesh supported by 3,500 employees in addition to 400 sales and services personnel. It has also diversified its presence in India spanning commercial vehicles, construction equipment and financial services. The company also has its Research and Development (R&D) operations in India, which is working with the global R&D team to develop new products and designs for the company. Additionally, it has a successful joint venture with Eicher Motors for mass market truck and bus business.
Volvo is expecting its market in India to grow at around 25% this year, compared to the last year. Volvo's heavy commercial vehicles saw a growth of 30%, and buses rose by 10-12%, construction equipment growth varied from 30-50%, depending on the product.3
SIGNIFICANCE OF MAKE IN INDIA
With regards to India's potential, Mr Kamal Bali, the Managing Director of Volvo India, said, “As Indians let us rekindle and rediscover our inventive and entrepreneur skills. Remember, when the world was wearing animal skin, we discovered cotton. Imagine the world without the number 0 or even without the binary code which we discovered. We did this all 2,000 BC. We can do it now. Let’s make India a powerhouse of manufacturing. Let’s make what will drive the world. Let’s make what will change the world.”4
These words echo the very ideology behind Prime Minister Narendra Modi’s Make in India initiative with programmes such as Skill India and Start up India to further boost development. Volvo credits its success in the country by having its goals aligned with the national and state priorities such as developing environment-friendly products, helping urbanisation, ensuring safety standards and contributing to skill development.5 This relationship will only continue to grow further as with the Make in India initiative, as clearly the aspirations of both the Indian government and Volvo India for the nations are aligned. With their logistics, telematics, truck technology and IT services, the company aims to create a 360-degree footprint and ‘Make in India’.6
VISION FOR FUTURE
“We have already invested USD 60 million in doubling our capacity for the past 2-3 years. We have also invested in Volvo Financial Services, our arm that will lend to buyers of Volvo trucks and buses. We have also invested in products. While we are fully geared up for the new emission regime by 2020, we are aiming to double our revenues over the next five years in India”, according to Mr Bali.7
He added that going forward he believes that Volvo should be growing anywhere between 11-14% points over the next three years. The National Electric Mobility Plan 2020 (NEMMP) road map and Faster Adoption and Manufacture of Electric vehicles in India scheme (FAME) will also compliment Volvo India’s future growth.8 With the government of India leading the helm of manufacturing and economic development of India through the ‘Make in India’ initiative, the vision of Volvo India can be soon realized.