Volvo set to roll out assembled cars under 'Make in India' initiatives

Faith Castro
May 19, 2017

Tata Motors-owned Jaguar & Land Rover is ahead of Volvo that has sold around 1,500 cars in 2016.

"Each locally assembled Volvo Car will have same global standards as anywhere else in the world", said Tom von Bonsdorff, Managing Director, Volvo Auto India. The first Volvo model to be assembled there is the XC90 premium seven-seater SUV.

Geely-owned automaker Volvo Cars said on Thursday it would start vehicle assembly operations in India this year aiming to grab a bigger share of the country's fast-growing premium auto segment. Currently, all Volvo cars are being imported as completely built units (CBU), and hence, they attract more taxes. With the launch of new cars this year, the company is going aggressive on both the product and network expansion side. Volvo now has a segment share of close to 5% and aims to double this by 2020.

Pointing out that vehicle assembly in India was an important step for his company, the CEO said their aim was to increase sales in the fast-growing market and double the firm's market share in the luxury segment.

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While the Indian premium market is still in the teen stage, industry experts expect a rapid growth by 2020. The car-maker has witnessed a robust 32 percent growth in sales volumes in the past two years, and aims for the same in 2017. "Right now India is a very small market for us because of strict import restrictions and our models are fully imported", he said. Von Bonsdorff said that with regard to India, the company is bullish about electrified alternatives.

GM will not leave India entirely. The contract manufacturing keeps investments in the assembly operations low and allows the company to be more aggressive in terms of margins and profitability in the Indian market. "Prices should be set according to the value of the auto and that we would not change", Samuelsson said.

India will export vehicles mostly to Mexico and South America, among other destinations, while GM Korea will ship Korean-made cars to North America, Southeast Asia, Australia and Pakistan.

"Our target is to double our sales in India in the next 2-3 years and also double our market share in India". The Talegaon plant has a capacity of 130,000 vehicles a year.

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