The Volvo Group’s Indian joint venture company VE Commercial Vehicles (VECV) to invest a total of Rs. 2.8 bn in the production of the new global medium-duty engine in India. The investment gives the Volvo Group a complete facility in India for processing and assembling the new medium-duty engine, which will be introduced in the Group’s trucks and buses worldwide in the next few years. Volvo CEO Leif Johansson says, “The Group will now have an engine platform that combines the latest in Japanese technology with India’s highly competitive production cost.”
Through this investment, it will be possible for the Volvo Group to locate most of its production of medium-duty engines to VECV’s plant in Pithampur. VECV has an established supplier base in India and efficient purchasing channels and already today, VECV produces about 40,000 engines per year in the existing plant. The investment in Pithampur will result in an annual production capacity of an additional 85,000 new medium duty base engines.
The new medium-duty platform comprises five, seven and eight-liter engines, in configurations from 215–350 horsepower. The engines will be manufactured to cope with emission requirements according to the Japanese PNLT (Post New Long-Term), the US EPA 2010, as well as Euro III-VI. The production of medium-duty engines in Pithampur is expected to commence in 2012.
“This investment will catapult VECV into India’s largest and technologically most advanced engine manufacturer,” says Siddhartha Lal, Managing Director and CEO of VE Commercial Vehicles. “The Volvo Group’s advanced technology and quality-based approach will give Eicher’s heavy-segment customers unparalleled reliability in India.”  
The Volvo Group’s joint venture company, VE Commercial Vehicles, includes the entire Eicher Motors’ truck and bus operations, as well as the Volvo Group’s Indian sales operations for trucks and the service operations for trucks and buses. The joint venture company was formed in 2008.