Indian source for Iveco parts
Page 10
If you've noticed an error in this article please click here to report it so we can fix it.
by John Kendall • Iveco will source some components for its European models from India and may also build vehicles for Europe there in the future, according to chief executive Giancarlo Boschetti.
Speaking at the launch of the old Iveco Ford Cargo, being built by Iveco subsidiary Ashok Leyland in India, Boschetti described the venture as "a big chance, Ashok Leyland is going to be a source of supply for Iveco."
Production of the old Cargo finished at Langley more than a year ago and a new plant is under construction at Hosur near Bangalore. Series production is due to begin next April, following a £237m investment.
Some Indian-made components were fitted to the last Cargos built at Langley, but Boschetti said that Indian-built Cargos will not be sold in Europe. Any future Indian-built vehicles marketed in Europe will be part of existing European model ranges. Iveco plans to sell the Indian-built Cargos in all export markets outside Europe and the US. Ashok Leyland will be the sole source of those vehicles.
Production will be around 2,000 vehicles in 1994, but Hosur will eventually have a capacity of around 26,000 vehicles a year. Initial models will be the Cargo 709 and 909 4x2 rigids with GVWs of 7.35 and 9.0 tonnes. Power will come from the four-cylinder, fourlitre, naturally aspirated Iveco 8040 engine producing 61kW (82hp) at 3,000rpm. By 2000 the Cargo will have replaced all the old Leyland-based models in the Ashok Leyland range.
News that Iveco will source parts and vehicles from India could cast doubt over the longterm future for some of Iveco's European plants, including the New Cargo plant at Langley. Indian pay levels are a fraction of European labour costs.
Recent liberalisation of the Indian economy has seen Iveco increase its shareholding in Ashok Leyland. It has a 30% stake in a joint venture with the Indian finance group Hinduja. Iveco and Hinduja now hold 51% of Ashok Leyland shares, up from 40% a few months ago.