The plant will produce technologically advanced Euro 6 emission-compliant engines.
According to the company, the engine manufacturing facility will be a global hub for meeting the medium-duty automotive engine requirements of Volvo Group globally for five and eight litre engines.
The Euro 6-compliant diesel base engines will be supplied to Volvo Group plant in Venissieux, France, where these engines will be assembled for the Volvo Group Euro 6 requirements.
"It puts us in an extremely advantageous position vis-a-vis competition on engine technology," said Siddhartha Lal, managing director and chief executive, Eicher Motors in a statement.
The company said that Euro 6 platform will be adapted to Euro 3 and 4 engine technologies to meet the VECV requirements and other Volvo Group requirements for this type of engines in Asia.
The company added that it has developed the initial capacity of 25,000 units per annum in phase-I at an investment of Rs.375 crore.
The capacity will be increased step by step to 100,000 units per annum as per the market requirements with an additional investment of around Rs.125 crore.
--IANS (Posted on 31-07-2013)