Eicher Motors eyes 15% mkt share in HCV segment by 2015

Lal hopes to cross the 30% market share in 5-12 tonne segment.

Eicher, Volvo plan to invest Rs 288 crore in their engine manufacturing joint venture to raise capacity by 85,000 engines per year from 2012.  On June 11, CNBC-TV18 reported that VE COMMERCIAL Vehicles (VECV), the joint venture between India's Eicher Motors and Sweden's Volvo, will invest Rs 290 crore.

As per the arrangement, Volvo will source engines from the Eicher JV for global operations. The plant will make engines with displacement ranging from five to eight litre which will meet Euro IV to Euro VI emission norms.

Lal said the JV is crucial to integrate with the company's supply chain. "The engine joint venture is the first step towards a larger partnership with Volvo."

Volvo said it has the intellectual property rights (IPR) for the engine produced in the joint venture with Eicher Motors. "We have worked out a royalty agreement with Eicher." The Eicher, Volvo brands will contine to remain separate, it added.

Below is a verbatim transcript of the exclusive interview with Siddhartha Lal and Par Ostberg, Chairman, VECV on CNBC-TV18. Also watch the video.

Q: How much is Volvo investing?

Lal: In the ballpark of Rs 300 crore they are putting in and that is mainly towards the new engine facility which will be in Pritampur and this engine facility will be catering to around 85,000 base engines which is of this new medium duty engine platform which is required for the entire Volvo group requirement. So we will be supplying to Europe for them to build further Euro-V and Euro-VI engines and we will be supplying Euro-III and Euro-IV engines from India itself.

Q: In terms of brand, what really happens as far as brand is concerned and also is this first step in partnership and can we expect more developments with regard to Eicher and Volvo?

Ostberg: When it comes to the brand the Volvo brand and the Eicher brand remain separate brands catering to different customers and that is going to be kept. So there will be no changes there.

Obviously we have ambitions to develop this very successful joint venture I should say even further in the future and the investment that we have presented today is obviously one first important step in the development of the joint venture that we have with Eicher Motors.