Volvo Signals Price Hike as Currency and Supply Pressures Hit Business

Volvo Car India may raise prices before its next scheduled annual review as currency movements and higher logistics costs put pressure on its business, while supply disruptions limit its ability to meet festive-season demand.

Jyoti Malhotra, managing director of Volvo Car India, said the company was finding it increasingly difficult to absorb the cost increases.

“On top of it, there is a forex issue, which means price increases. I think it’s inevitable. We will not be able to hold this,” Malhotra said, speaking on the sidelines of the EX90 launch.

Volvo normally reviews prices once a year, but the current pressure could require an earlier correction. Malhotra did not disclose the timing or quantum of a possible increase.

“We will not be able to wait for that next cycle. It is getting very challenging and we will have to do some course correction in between,” he said.

The pricing pressure comes alongside supply problems that have become more pronounced over the past few months. Malhotra said geopolitical uncertainty had increased costs and lead times, making delivery schedules harder to predict.

“From a supply chain perspective, the costs have gone up, the lead times have gone up and the whole system is not predictable,” he said.

The disruption has affected the EX30 electric SUV, which Malhotra said was gaining momentum before availability became a hurdle.

“EX30 was getting momentum and then we had this major supply issue. And I think those have not gone away yet,” he said.

He declined to quantify the sales impact, saying supply commitments remained subject to change. “Today, I get some confirmation and tomorrow, the same thing goes for a toss,” he said.

Unpredictable deliveries are particularly difficult during India’s festive season, when customers often want vehicles within a specific buying window. Malhotra said Volvo could have performed better with adequate supplies.

“This was a phase where we really felt that we could have done much better,” he said.

The challenges come as luxury manufacturers seek to widen their customer base in India. Malhotra said the segment remained around 1% of the overall car market, with annual volumes of roughly 50,000–55,000 units. In his assessment, its expansion over the past few years had been limited. “The real challenge is together, how can we grow the pie?” he said.

While the move towards premium vehicles in the mainstream market points to rising aspirations, Malhotra said stronger luxury demand would also require higher incomes and a more supportive regulatory and tax framework.

Import duties, GST and road taxes add to acquisition costs. Customers familiar with overseas prices recognise the difference, he said.

“They realise that what I am paying, a big chunk of that is tax. So that discourages them.”

Malhotra remained cautious about the luxury market’s prospects for the remainder of the calendar year, citing the external environment.

Volvo now faces the task of securing vehicles during a crucial sales period while recovering higher costs without weakening buyer interest.