To invest Rs 150 crore by Scania to set up plant in Bangalore

bNEW DELHI: Announcement came from Swedish commercial vehicle-maker Scania today that it is going invest Rs 150 crore to set up a manufacturing facility in India in the next one year. 

The proposed plant in Bangalore will roll out 2,000 heavy haulage trucks and 1,000 inter-city buses and coaches over the next five years. 

The company, which has been present in India with a partner, Larsen & Toubro (L&T), since 2007, has now formed a new entity -- Scania Commercial Vehicles India. 

"This investment furthers Scania's commitment to the Indian market and this is the right moment for us... This unit will enable us to shorten our lead times and enhance service levels to our customers," Scania Managing Director Henrik Fagrenius said in a statement. 

With the Indian commercial vehicles segment likely to register a growth of 8-10 per cent this year, the outlook for the industry is very promising, he added. 

The company said it will invest Rs 150 crore in the coming year to set up the plant in Narasapura Industrial Area, Bangalore, and the first truck will be rolled out in 2013. 

"Scania foresees a number of benefits with establishing the new plant... This will also go a long way in sourcing of components locally from India," Fagrenius said, without sharing details about component sourcing plans. 

This plant will serve as a completely knocked down assembly unit for truck and bus chassis during Phase I of operations. 

Bus body-building and service workshops for trucks and buses will also be a part of this facility at a later point of time, the company said. 

Talking about the capacity of the facility, Scania said it plans to produce around 2,000 heavy haulage trucks and 1,000 inter-city buses and coaches from this plant within five years. 

Once fully operational, the plant will employ up to 800 people over the next five years. 

It was also announced by the company that it will sell engines to vehicle manufacturers in India. 

"Scania is also preparing to sell engines to its OEM customers. These engines are more compact, resulting in lesser fuel consumption, leading to lower emissions," the firm said without sharing details. 

Currently, Scania has several sales and service points through L&T. So far, L&T has distributed over 600 of Scania's heavy trucks in India. This relationship will continue, the company said. 

"Scania's direct presence will further boost the company's sales, service, greater variety of models sold and shorter availability time," it added. 

The company's new Indian entity will establish a plant for bodywork and undertake the outfitting of trucks and buses, as well as set up a parts depot within the country.