Volvo India, the Swedish auto maker, has finally decided to establish an assembly plant in the country. Interestingly, the auto maker was in the practice of bringing its models via Completely Built Unit (CBU) in the Indian market. On this move of Volvo India, industry experts are of a view that the news by Swedish auto maker has come after the enforcement of 25 per cent hike on the import duty in recently presented Union Budget. It must be noted that if Volvo India will bring more models in the Indian auto market, it will attract a more sum of tax from the government.
Sources close to the development process said that the auto maker is looking for a successful venture in the Indian auto market in order to carry its operations. The recent plan of the company is to plan a joint venture with the already established player of the Indian market, which would help it employ less time and investment. Interestingly, the first candidate that is expected to be selected by the car maker for partnership is Volvo AB who is currently engaged in manufacturing trucks.
Both of these auto makers introduce their models under the same moniker, which further consolidates their rumour of partnership. It must be noted that the car business is under the control of Chinese auto giant Geely, whereas the truck and bus manufacturing unit is managed by the Swedish company. A point to note here is that the Volvo AB operates under a joint venture with Eicher in the Indian market and offers an array of medium and heavy commercial vehicles. Auto analysts believe that car maker can utilise some part of Eicher Commercial Vehicle’s plant, which is based in Bangalore.
Coming to the sales figures of Volvo cars in India, the auto maker managed to deliver just 820 units during 2012, which made it quite a small player of the Indian auto sector. On the other hand, its stiff competitors BMW and Audi managed to deliver more than 9,000 units to the domestic buyers. It is believed that the establishment of local assembly unit would help Volvo cars to expand its domestic operations, which might prove lucrative for the auto maker in the near future.