Volvo India to focus on biz diversification

Kolkata: Anticipating a demand slowdown in the mining and construction equipment manufacturing business, Volvo India is focusing on alternatives such as the rental and used equipment business, lubricants, annual maintenance contracts as well as after-sales service to tide over the crisis period. This is part of a global long-term strategy initiative at Volvo.

According to Mr Mrityunjaya Singh, Managing Director of Volvo India, the current situation may slow down the growth rate of the mining construction equipment division to 10-15 per cent in 2008 from 30 per cent in 2007.

“We launched the rental business early this year and are also focusing on the used equipment business,” he said.

“The fundamental requirement for equipment in the country has not declined as yet. We feel that there is an opportunity in the rented business as well as the used equipment segment,” Mr Singh said.

Currently, Volvo has about 11 dealers in the segment and three of them have started Volvo rental. The rest of the dealers will take up the rental business soon. They are also being trained to assess used equipment so that can take up the used equipment business.

Talking about the rent market in India, Mr Singh said, “it is a highly fractured market with only two national players, including Kolkata-based Srei.

“We find potential in this segment as it is large both in size and value. However, there are no estimates on the volume of business,” he added.