Scania set up plant in Bangalore, invest Rs. 150 crores

Swedish commercial vehicle-maker Scania will invest Rs. 150 crore to set up a manufacturing facility in India in the next one year. Scania will launch new models and will also enter the Luxury bus market which has been growing from 1000-2000 units year-on-year.The proposed plant will be set up in Bangalore and will roll out 2,000 heavy haulage trucks and 1,000 inter-city buses and coaches over the next five years.

Scania has formed a new entity — Scania Commercial Vehicles India. Since 2007 the company has been present in the Indian market with Larsen & Toubro (L&T) as a partner.

“The investment furthers Scania’s commitment to the Indian market and this is the right moment for us… This unit will enable us to shorten our lead times and enhance service levels to our customers,” Scania Managing Director Henrik Fagrenius said in a statement. With the Indian commercial vehicles segment likely to register a growth of 8-10 per cent this year, the outlook for the industry is very promising, he added.

The company said it will invest Rs 150 crore in the coming year to set up the plant in Narasapura Industrial Area, Bangalore, and the first truck will be rolled out in 2013.

“Scania foresees a number of benefits with establishing the new plant… This will also go a long way in sourcing of components locally from India,” Fagrenius said, without sharing details about component sourcing plans.

This plant will serve as a completely knocked down assembly unit for truck and bus chassis during Phase I of operations. Bus body-building and service workshops for trucks and buses will also be a part of this facility at a later point of time.

Once fully operational, the plant will employ up to 800 people over the next five years. The company also announced that it will sell engines to vehicle manufacturers in India.

“Scania is also preparing to sell engines to its OEM customers. These engines are more compact, resulting in lesser fuel consumption, leading to lower emissions,” the firm said without sharing details.

Currently, Scania has several sales and service points through L&T. So far, L&T has distributed over 600 of Scania’s heavy trucks in India.