Scania to ramp up investments in Karnataka

Global truck and bus manufacturer Scania, a Swedish company based out of Stockholm, is all set to invest Rs 150 crore to ramp up its bus production capacity in Karnataka.

Scania Commercial Vehicles India (SCVI), which operates out of Narsapura near Bangalore, has already  invested Rs 250 crore in the plant.  

Revealing the investment plan to Deccan Herald, SCVI Managing Director Anders Grundstromer said the investment will enhance the company’s production capacity in the bus segment with total investments reaching Rs 400 crore.

“The plant houses two manufacturing units – one for truck assembly and the other for buses. We began production of trucks at the new facility during June 2013 and production trials have started for mining and off-road trucks. The bus assembly line started two months back and will start production by November this year,” he said.

In the initial stage, Scania plans to produce 1,000 inter-city buses and coaches.

 “Currently, the localisation is happening at a very slow pace with 18 per cent for trucks and 100 per cent for bus bodies. Once our assembly line is ready, the buses will have 80 per cent localisation. We will double our capacity to 2500 buses and 5000 trucks within two years,” Grundstromer said.

Besides serving as the company’s head office, the facility will be a centre for all commercial operations across the country. The centre’s operations will comprise final assembly of trucks and buses with bodywork and building of complete coaches along with a service workshop and central parts warehouse for timely service.

Scania buses currently on offer are in three models, with purpose-designed coaches for luxury intercity or charter travels. Lauding the Bangalore facility as an ideal location for its clients, Grundstromer said the investments in Bangalore mark a new era for the company and its largest industrial footprint in Asia so far.

“We will produce our first ethanol engine buses at this plant from January 2015. Subsequently, after two years, we will go in for exports to cater to the demands of Sri Lanka, Bangladesh, China, APAC countries, the Gulf region and Africa. At that point, we will go in for additional investments,” Grundstromer said. 

“We are here to give sustainable transport solutions. Here, I would like to say that it will help us create great quality vehicles which will showcase the ‘Made in India’ label globally,” he said.

German auto giant Volkswagen took control of Scania in 2008 after it purchased the Wallenberg family stake in the Swedish company for 27 billion kronor ($4.37 billion). Volkswagen now holds 68.6 per cent of voting rights.