Volvo Eicher Commercial Vehicles (VECV), a joint venture between Volvo and Eicher Motors, is planning to invest INR2.88bn ($53.41m) at its Pithampur plant in Madhya Pradesh, India.

With the investment, the company aims to develop a complete manufacturing and assembling plant.

The new plant will produce medium duty engine which would be introduced in the company's trucks and buses worldwide over the years

VECV chief executive Vinod Agarwal was quoted by PTI as saying that the engine capacity would also be ramped up from 60,000 units to 160,000 units by 2016-17.

Last year the company had sold more than 49,000 vehicles registering a growth of 25%, while reporting net sales of INR49.16bn ($911.7m).

In 2011, the company had recorded a market share of 9.7% for Eicher branded buses compared to 6.7% cent for the same period in 2010.