Currently, engines for its FH12 and Fl7 series of Leviathan trucks are being imported from its parent company. ``Manufacturing engines at our Hoskote plant would help us control costs and increase local content in our vehicles,'' Volvo India Ltd managing director Ravi Uppal said.

``We are certainly looking at this option but we need volumes to go for it. Once our sales go up, we will start manufacturing engines at our plant," he said. It may be recalled that Czech-based truck maker Tatra, which makes its heavy trucks and tippers in India through a joint venture with Venus Udyog, was also mulling developing engines in the country but later pigeonholed the project in view of the economic slowdown.

Uppal said a volume of about 3,000 units, including all the commercial vehicles andconstruction equipment, would be needed annually for developing engines viably in the country. ``We are optimistic of achieving this number in the next few years,'' he said. The present localisation level in Volvo vehicles stands at 40 per cent and by the end of 1999 this would be ramped up to 50 per cent.

Meanwhile, Uppal said Volvo had put its export plans in the backburner till the truck maker, who has invested about Rs 300 crore in its manufacturing facility, consolidated its position in the domestic market. ``We have decided to go slow on this front because our current target is to capture a substantial market share in India,'' he said.

Volvo had earlier said that India would be an export base for the company to cater to Asian countries like Nepal, Sri Lanka, and Bangladesh. ``There is certainly a market for our vehicles in these countries. But at this point of time we would like to focus our attention on domestic market,'' he said.

In a bid to jack up sales, Volvo had initiated talks with a numberof cement, steel and petrochemical manufacturers who need big trucks to haul their products and the response had been positive, Uppal said, but declined to divulge details.

Though the prolonged economic recession took a severe toll on the automobile industry in general and on commercial vehicle segment in particular, Volvo managed to beat the recessionary heat to some extent, thanks to its decision to make trucks only on demand. ``The recession does have a bearing on our scheme of things too. But we are not worried about piling up of inventories or cutting down working days because we manufacture trucks only after receiving orders,'' Uppal said.

Uppal said Volvo would wheel out a new range of vehicles during the year, including two bus models and tippers. While the `Inter-City' bus was slated to hit the roads towards the end of the year, the `Metro' buses would be rolled out in the year 2000.

The `Inter-City' bus would have a higher seating capacity of 49 seats and would be powered by a 230 bhphorizontal engine, mounted at the rear of the bus, Uppal said. The company had also finalised plans for introducing its first tipper model in the market shortly to take on similar vehicles from Tatra Udyog, TELCO and Ashok Leyland.

``There is a good market for tippers in India and we would have a strong presence in this segment,'' he said. Volvo has two models up its stable now -- the FH12 launched in August last and the recently introduced FL7.

The FH12 is priced at Rs 25.43 lakh on the basis of axle combination and the Fl7 would carry an ex-factory price tag of Rs 19.8 lakh. The company also plans to introduce lighter versions of commercial vehicles in the future to `have a presence in every segment', Uppal said.