Swedish carmaker Volvo has finally taken the plunge to start local assembly, 11 years after entering India. The assembly operations commenced today at Volvo Trucks’ plant near Bengaluru with the XC90 SUV. As of now, Volvo will locally-assemble only the diesel variants of the XC90, while the T8 plug-in hybrid continues to be imported.
The carmaker is carrying out the assembly operations on a contract manufacturing basis with Volvo Trucks. The move is part of the carmaker's decision to use the existing infrastructure and production licenses of Volvo Group India – the truck, bus, construction equipment and Penta engines manufacturer – for its assembly operations.
Volvo Auto India is also evaluating local assembly for other models built on Volvo’s SPA platform, such as the S90 sedan and the soon-to-be-launched new XC60.
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. The local assembly of the XC90 is unlikely to result in a reduction in prices, said Volvo India’s spokesperson to Autocar India.
“The last three years have been good for us in India and we are on-track to gain a bigger share of the segment,” Charles Frump, the newly appointed managing director for Volvo Auto India said.
The Swedish carmaker aims to double its market share in the luxury vehicle segment to 10 percent by 2020. Volvo sold 1,584 cars in India in 2016 and is on track to achieve sales of 2,000 units, a growth of over 25 percent year-on-year by end of 2017, the spokesperson added.
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