Eicher to build up capacity before Volvo JV

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Pune: Ahead of its joint venture (JV) for trucks with Swedish major Volvo, Eicher Motors is mulling a major capacity expansion, even as it plans to retain its badge on products that will be manufactured by the JV.

"It is possible for us to reach 60,000 vehicle sales annually by 2010, when we will need over 200 dealers," said A Ramasubramanian, CEO, Eicher Motors Commercial Vehicles.

"Our revenue is growing at seven to nine percent, having sold over 28,000 vehicles last year," he added. The bus and truck manufacturer has invested Rs 1,000 crore this fiscal year at its Pithampur plant, near Indore in Madhya Pradesh.

Eicher Motors and Volvo had announced their decision to form a JV in December. The JV is expected to be formed shortly and will be located at Pithampur, mainly for making trucks. However, the buses manufactured in the JV will be branded as Eicher products while those by the Bangalore based Volvo Busbody Technologies are named as Volvo.

This distinction in badging will help, since Eicher will then be taking on domestic competition, from Tata Motors and Ashok Leyland, with a lower technology and hence, a lower priced product. Once the JV is formed, Eicher is expected to offer support service to Volvo buses, through its wider sales and service network, said Eicher officials.

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