Volvo has announced that it will start vehicle assembly operations in India in 2017. This positions the company for further growth in the fast-expanding premium car segment in India. 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 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 Volvo Group’s existing infrastructure and production licenses via a contract manufacturing agreement near Bangalore. “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 start assembly in India and market its vehicles as ‘Made in India’ fits well with a similarly named initiative launched by the national government several years ago, which seeks to highlight and promote Indian manufacturing prowess. Sources close to the company have hinted that there will not be any major price revision as Volvo's current offerings in India are already priced very competitively. 

While the Indian premium market is still relatively small, it is forecast to grow rapidly in coming years. Volvo currently has a premium segment share of close to 5 per cent and aims to double this by 2020. In 2016, Volvo sold over 1,400 cars in India, an increase of 24 per cent compared to 2015. Year-on-year sales growth in the first four months of 2017 amounted to more than 35 per cent.