Volvo begins India assembly operations with XC90 SUV, other models in the pipeline

Volvo Cars, the Swedish luxury car giant, on Tuesday started rolling out its locally assembled the luxurious XC90 sports utility vehicle (SUV) from its factory near Bangalore to achieve 10 per cent market share over the next three year in Asia’s third biggest economy. At present, it has a 5 per cent market share with a sale of 1,584 unit sales last calendar year in the 35,000-unit luxury car market. It competes with market leader German giant Mercedes-Benz which sold 13,231 cars in calendar year 2016, followed by archrival BMW at 7,861 units and Audi was placed third at 7,742 units. Tata Motors-owned British sports car maker Jaguar Land Rover had sold about 3,000 units. Volvo brand which started its local assembly 11 years after entering India plans to also manufacture its popular SUV models such as S90, XC60 and S60 a sporty sedan. “We have a common SPA platform and models build on this platform such as S90 and soon to be launched new XC60 can be assembled in India,” Charles Frump, the newly appointed managing director at Volvo Auto India told Financial Chronicle. “Rolling out made-in-India Volvo cars for the Indian market is our commitment to this important market,” He said the bigger plan was to expand its global footprint with factories around the world and to make its popular sedans, sports cars and performance cars. “Five years ago, we built cars in Europe and exported them to overseas markets. But now we have already started setting up our production factories across the world with huge investments,” Frump said. Four years ago, Volvo set up a factory in China and it will be selling over 1,00,000 cars in China this year whereas next year it plans to start a full-fledged state-of-the-art facility in the US to produce Volvo cars locally. While imported cars attract various taxes amounting to about 118 per cent, the assembled cars at its Volvo Trucks’ plant near Bengaluru will cost half of it. “The way we price our cars globally independent of where they are produced our prices remain aggressive and attractive to the buyers giving them all the benefits,” Frump said. At present the company Volvo will locally-assemble only the diesel variants of the XC90, while the T8 plug-in hybrid will continue to be imported. Despite its models being subject to a higher rate of duty vis-à-vis locally assembled rivals from Audi, BMW, Mercedes-Benz and Jaguar Land Rover, Volvo has so far managed to price its products very competitively and sell more cars aggressively in the country. “The last three years have been good for us in India and we are on-track to achieve 10 per cent market share by 2020,” Frumps said. Volvo Cars in India clocked a robust 32 per cent growth in sales volumes in the past two years and the 2017 trend is as per its plan to achieve 2,000 cars, which will witness a growth of 25 per cent, the company said. michaelgonsalves @mydigitalfc.com

Columnist: 
Michael Gonsalves