Charles Frump, managing director, Volvo Cars India, speaks to Hormazd Sorabjee on boosting overall sales with the soon-to-be launched XC40 SUV, setting itself apart from German rivals with radar-based safety features, and expanding CKD operations.
What are your growth expectations with the XC40 SUV which is to be launched in India on July 4?
The Volvo brand in India is in a good position and it’s nice to see that Indian customers are accepting our products well. We are looking forward to launching the XC40 in India. In 2017, we registered 28 percent year-on-year growth and we aim to grow more than that in 2018 as we enter a whole new segment with the XC40.
In terms of future growth, we’re definitely eager to get numbers. Last year, our market share was five percent, and we are looking to double that by 2020. It’s an aggressive goal, but we are confident of achieving it as we have capable SUVs in our portfolio and India is crazy about SUVs.
The XC40 is to be launched in India on July 4.
The XC40 will be at the lower end of the luxury SUV space, where you have not been present before. How do you plan to get more customers on board? And how will Volvo differentiate itself from the German trio?
One of the exciting things about the XC40 is that it is already much anticipated in India. We expect the model to bring in customers who will be new to luxury and to SUVs too.
The Scandinavian design is absolutely unique from what our competitors offer, and, in fact, will appeal strongly to our younger customers. And, safety, of course, will continue to be one of our key pillars. We are also offering a very unique feature of radar-based technology in our cars in India which most of our competitors don’t have.
There are limitations on radar frequencies for automotive use in India. Is that making you hold back some safety features?
I think that limitation is quite small. We have been able to bring all the technologies in the XC90, S90 and V90 with no real limitations.
What are your thoughts on the high level of taxation on hybrids in India? Will that deter you from introducing more hybrids?
Although full-electric is the future, how we get there is more important. At Volvo, we see plug-in hybrids as an important step to full-electric and we are working with the government towards that goal. We even expressed our intent of electrified vehicles at a recent event where Indian Prime Minister Narendra Modi met the Swedish Prime Minister Stefan Löfven in Sweden.
We think plug-in hybrids are the right step because it will take some time to get the infrastructure for full-electric vehicles in place. We are ready to go with plug-in hybrids virtually across all models, and are looking for the opportunity to bring more of them.
Volvo is focusing largely on diesel and not so much on petrol in India. What is the strategy there?
When we look at the market, the premium segment has been very focused towards diesel. We have been very excited to bring our four-cylinder diesels here and they have been well accepted. However, we also have our petrol T8 on offer, but if we see the luxury vehicle trend starting to change in favour of petrol, we will bring more petrol variants in the future.
Are you on target with CKD operations? Typically, there is a price advantage with local assembly. Will there be a cost benefit to the Volvo customer?
Recently, we started to produce the XC90 in India and our customers have been extremely satisfied with the cars coming out of our Bangalore plant. We have also started the local assembly of the S90 at the plant. Yes, we are adopting a top-down approach. We want to first localise our 90 series before looking at others, such as the XC60. We are doing our best to bring our new platform – the CMA – to India. It may take some time but we are working with the government on it.
In terms of pricing, our models have been priced very aggressively compared to the competition. We have made our investment by pricing our CBU models competitively, and would look at making up for it in the CKD phase.