Volvo-Eicher to invest Rs.1000 Cr , to set up new engine facility

Volvo Eicher Commercial Vehicles (VECV) has firmed up a two-year plan to invest Rs 1,000 crore to set up an engine manufacturing facility and expand the capacity of commercial vehicle production.

While Rs 550 crore has been earmarked to enhance capacity for rolling out commercial vehicles, the remaining money would be invested to operationalise the proposed engine-manufacturing unit. Once the expansion programme is complete by the end of next year, the company would be able to scale up its average monthly production volumes by over 35 per cent - to 5,500 units from the current 4,000.

Out of Rs 1,000 crore, The company has invested about Rs 200 crore at the existing facility in Pithampur in Madhya Pradesh. The engine plant will come up at the same site. It plans to commission it by mid-2013.

The new engine unit would initially have a capacity to produce 50,000 engines by 2013. It would be ramped up to roll out 100,000 units by 2015