Premium vehicle manufacturer Volvo Cars has announced plans to start vehicle assembly operations in India in 2017. The move to begin local assembly, which positions the company for speedier growth in the fast-expanding premium car segment, comes 10 years after the Swedish carmaker entered the Indian market.
The assembly operations will be located near Bangalore and focus on models based on Volvo’s SPA modular vehicle architecture. The first Volvo model to be assembled there is the XC90 premium seven-seater SUV. Additional models slated for local assembly will be announced at a later stage.
Volvo Cars is working together with Volvo Group, the truck, bus and construction equipment manufacturer, and will make use of the Volvo Group’s existing infrastructure and production licenses near Bangalore. No further contract and financial details have been disclosed.
“I am pleased that as of this year we will be able to start selling Volvos that are Made in India,” said Håkan Samuelsson, president and chief executive of Volvo Cars. “Starting vehicle assembly in India is an important step for Volvo Cars as we aim to grow our sales in this fast-growing market and double our market share in the premium segment in coming years.”
"We are delighted to announce the commencement of an assembly unit,” said Tom von Bonsdorff, managing director, Volvo Auto India. “It’s a sign of the company’s strong commitment to India.”
Volvo's decision to begin local assembly operations is in line with the government's make in India programme and will help reduce vehicle prices, thereby giving a fillip to domestic sales.
Banking on growth in premium PV segment
While the Indian premium passenger vehicle market is still relatively small, it is forecast to grow rapidly in the coming years. Volvo Auto India currently has a premium segment share of close to 5 percent and aims to double this by 2020. In 2016, Volvo sold over 1,400 cars in India, an increase of 24 percent compared to 2015. Year-on-year sales growth in the first four months of 2017 amounted to more than 35 percent.
Volvo Auto India currently sells eight luxury models comprising the S60 sedan, S60 Cross Country, V40 hatchback, V40 Cross Country, XC60, XC90, XC90 Excellence plug-in hybrid, and the S90 premium sedan.
The carmaker currently markets its products through its dealerships in South Delhi, West Delhi, Gurgaon, Ahmedabad, Surat, Mumbai, Chandigarh, Coimbatore, Hyderabad, Chennai, Bangalore, Kochi, Vishakhapatnam, Kolkata and Vijayawada. Expanding soon to Lucknow and Pune.