XC40 to drive Volvo’s growth in India

Swedish carmaker Volvo expects to achieve its next big wave of growth in India with the newly launched XC40. Initial response suggests Volvo could be on to something big with the XC40. The SUV has garnered 200 bookings within a fortnight of launch.

The company aims to touch the 3,000-unit sales mark for the calendar year 2018, up from 2,029 units in 2017, with a major push coming from the XC40, which launched at Rs 39.90 lakh (ex showroom). It has targeted 5,000 units by 2020. Charles Frump, MD, Volvo Car India, believes the time was right for Volvo to introduce the XC40, as the small SUV segment holds good growth potential, with sales of around 6,000 units a year.

The brand has allocated 700 units of the XC40 for India for this year. “We expect the initial allotment to sell out quickly. From next year I think we are likely to double the allocation. So we expect to sell around 100-150 cars per month,” Richard Snijders, VP Asia-Pacific, Volvo Cars told Autocar India in an interview.

Interestingly, Snijders said that in a year, the carmaker will assemble the XC40 within India itself. The small SUV is the first car to be based on Volvo’s CMA platform.

Volvo currently assembles cars based on the SPA platform – such as the XC90 and S90 – at its plant in Bengaluru, and has confirmed that its mid-size SUV, the XC60, will also be assembled locally by the end of the July-September quarter.

IN CONVERSATION WITH RICHARD SNIJDERS, VP, ASIA-PACIFIC, VOLVO CARS

What is the potential for growth with the XC40?
The XC40 is going to be an entry level to our brand. Yes, we have the V40 and V40 CC, but they are not going to have a long life. So XC40 is the true entry level into our brand and we aim to attract new customers to theVolvo brand. In fact, the SUV will also appeal to a larger segment. Overall, the XC40 could contribute 30-35 percent to monthly sales.

The XC40 is priced competitively despite being a full import. How have you achieved that?
We’ve invested heavily to get a good entry-level price in order to build momentum. It is very important to not only have an attractive price, but also to not destroy dealer margins on the cars. The margins in India are definitely not has high as in other markets, such as Holland. The potential in India is phenomenal; but we’re still very small here. So we are keen to first establish the base and then work upwards from there.