New Delhi: Swedish truck and bus maker Scania AB is betting big on India. As the company prepares to start commercial production of buses at its factory near Bengaluru this month, it is also counting on a boom in mining activity to boost sales. “I think the mining sector where we are in, that segment is going to give us a lot of opportunity with new clarity from the government, especially in the coal blocks,” Henrik Henriksson, executive vice-president, head of global sales and marketing, Scania, told ETAuto in an interview.
Scania plans to start sales of locallymade tippers next month. The company owned by the Volkswagen Group introduced heavy-duty tipper trucks for the Indian mining industry in 2007 through Larsen & Toubro as its distributor and has since sold about 800 units.
The Indian manufacturing subsidiary was set up about three years ago, then employing about a dozen people. Now, it has over 600 people working for Scania India. “We are using India as one of the pillars when it comes to a global production system. One of our top priorities is to focus on this market. Very soon it will be one of our top five biggest markets in the world,” Henriksson said. “We are investing in people here for our global business operations.”
The potential for growth has made India one of Scania’s top priority markets for premium CV manufacturing. “Today, India is a powerhouse of the global economy. Where do you see a growth of 8% in the world today? Hardly anywhere. And this is what decides the market. So, of course, we need to be here,” Henriksson said.
Unlike some foreign manufacturers, Scania does not plan to sell or make India-specific products. “We have a one-product policy and we are making the same product which we make anywhere else in the world and sure we will have the demand for the same as India has a lot of scope for growth,” Henrik said.
The company has invested 40 million in the first phase of its bus and truck plant near Bengaluru. The plant can manufacture 1,000 buses and 3,000 trucks annually and expects to achieve full capacity utilisation soon. This year, it plans to sell about 1,200 trucks and buses. It is looking at making India a global hub for sourcing parts and to export fully-built buses and trucks to destinations such as South Africa and Latin America. Scania has made an additional investment of an undisclosed amount in a research & development centre in India, which will act as a back office and provide support services for global operations, taking advantage of the skills available in the country at a very competitive cost. The company is looking at new hiring for engineers. India is currently auctioning coal blocks for the power, steel and cement sectors.
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