The Volvo Group's Indian joint venture company, VE Commercial Vehicles VECV, is to invest a total of SEK 480 M (INR 2.8 bn) in the production of the Volvo Group's new global medium-duty engine in India. This 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.
Through this investment, the Volvo Group can 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; VECV already 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.
At the same time, the Volvo Group will invest an additional SEK 460 M in the group's production plants for engines in Ageo, Japan; and Venissieux in France. Through this investment, the group will have an annual final assembly capacity for 30,000 medium-duty base engines for Europe's market.
Development of the new medium-duty engine has been led by Volvo Powertrain in Ageo, and the engine has been designed to meet current and future exhaust requirements in Europe, the United States, and Japan. The facility in Pithampur will also conduct final assembly of engines for India and all of Volvo Group's global markets with Euro III and Euro IV emission requirements.
Production and final assembly of the engines for the Japanese market will be in Ageo, while final assembly of the engines for the European market will take place in Venissieux.
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 group's new medium-duty engine program will start being produced in Ageo in 2010 for the Japanese and US markets. Production of medium-duty engines in Pithampur is expected to commence in 2012.