Volvo Auto India, a completely owned subsidiary of Swedish luxury automotive marque Volvo Cars Group, is working on a long term strategy to command a strong position in the domestic passenger vehicle market. The company is aiming to increase its annual sales volume in the luxury car segment, which rolls out 30,000 units per year in the country. At present, the Indian arm of Volvo competes against the likes of BMW, Audi, Mercedes-Benz and Jaguar Land Rover, amongst others in the domestic premium car market. As per sources, Volvo Auto is mulling over the possibility of establishing its own localised manufacturing unit so as to tap the market potential from the Indian turf.
Expressing his opinion on the plans of local assembly operations and competition faced by company in the country, Tomas Ernberg, Managing Director (MD), Volvo Auto India, has been quoted as saying, “We are competing against stronger German rivals who have put up a huge distribution network that's aided by local plants to roll out cars at lower taxes. But we have to import cars by paying higher taxes. So, it will make sense to assemble our cars locally to pass on the benefits to our customers and increase our share in the Indian market.”
Evidently, Ernberg has not revealed any concrete details of a manufacturing facility in the country and is yet to finalise new investment plans. The Volvo Auto India's MD has affirmed that headquarters will make the final call in deciding location, investment and time frame for the planned local assembly unit. As per reports, Volvo was one of the first foreign auto makers to enter India market in the year 2006, before most of its present rivals like Audi and BMW, but failed to cash-in on the advantage. The Swedish car maker had sold just 812 units during 2012, as compared to sales of 9,375 units and 9,003 units recorded by both BMW and Audi, respectively, in the same period.
Industry experts believe that the Swedish auto major will continue to face obstacles in the Indian auto market. Expressing his opinion about Volvo Auto's problems in India, a Delhi-based auto analyst has been quoted as saying, “BMW leads the global luxury car market as well the India market. Same is the story with Audi and Mercedes Benz in the pecking order. Volvo has not gained in any markets or country so far and a resource-constrained company may not have an easy run in India either.”
Spearheaded by an Asian management, Volvo Auto India is looking to rework its product portfolio, besides offering an unparalleled authentic brand experience to the domestic luxury car enthusiasts. Speaking on the same, Tomas Ernberg, said, “We are realigning our dealership network as well as introducing new products with smaller and fuel-efficient engines.” At present, the Swedish auto major has 7 retail outlets in the country, with plans of setting up 3 more showrooms in Delhi, Bangalore and Gurgaon by the end of 2013 calendar year. Volvo Auto India is also working towards the launch of its V40 Cross Country compact crossover sometime in May '13 in the Indian auto market. The Volvo V40 will enter domestic scene via the Completely Built Unit (CBU) route and will compete against the likes of BMW X1, Audi Q3 and Mercedes-Benz B-Class Sports Tourer in the country.