Volvo Mulling Plans To Setup Local Assembly Plant In India

The Swedish luxury car maker, Volvo is currently mulling the prospect of setting up an assembly plant in India.



Volvo was first launched in India in 2006 and is much before many of its global rivals like BMW and Audi. In 2012 Volvo sold just 812 cars while BMW sold 9,375 units. The Audi was the latest entry among this and has sold 9,003 vehicles, 63% sales growth over the year 2011.



The Volvo currently is importing all its models via the CBU route and has to price them very competitively as it does not have a good hold on the luxury market like many of its foreign rivals. This is the reason for its failure in Indian market.

Volvo Auto India managing director, Tomas Ernberg, said, "We are competing against stronger German rivals who have put up a huge distribution network that's aided by local plants to roll out cars at lower taxes. But we have to import cars by paying higher taxes. So, it'll make sense to assemble our cars locally to pass on the benefits to our customers and increase our share in the Indian market."

Speaking on the same, Tomas Ernberg, said, “We are realigning our dealership network as well as introducing new products with smaller and fuel-efficient engines.” However, Ernberg hasn't revealed any concrete details of a manufacturing facility in India and is yet to finalize new investment plans.

Currently, the Swedish car maker has 7 retail outlets in the country, with plans of setting up 3 more showrooms in Delhi, Bangalore and Gurgaon by the end of 2013. The popular models of Volvo are Volvo XC90, XC60, S80 and S60. The company expects sales of 1,200 units in 2013. The local assembling locally will help the Volvo to reduce the price.

Volvo's target is to double its sales from current 440,000 units to nearly 800,000 units by the year 2020. The company aims to increase sales by 20,000 units per year by the current decade’s end in India.

Volvo will launch V40 Cross Country for the Indian market soon. And we are expecting just the 1.6-litre petrol and 2.0-litre diesel engine variants in India. The V40 hatchback gets bigger alloy-wheels with chunky tyres, body claddings, roof rails, skid plate and blackened rear view mirrors

The V40 Cross Country will compete with the Audi Q3 and the recently facelifted BMW X1.