After observing the luxury car segment of the Indian auto market since quite a while, the Sweden based automotive giant, Volvo is now gearing up to take its first step in the country. It is expected that the auto manufacturing hub of the country, popularly known as the Detroit of the East, Sanand in Gujarat, may receive yet another plant from a car company.
According to the sources close to Chief Minister Office, Gujarat, Indian subsidiary of the Swedish car maker is on a land hunt to set up a plant to assemble its Completely Knocked Down units in the country. The company, which is backed by Geely Autombile of China, will be sending a team of its top honchos in August 2012 to meet Narendra Modi, Chief Minister of Gujarat.
Volvo Auto forayed into the Indian automotive market back in 2007 and as of now channel its cars through Completely Built Units (CBU) route in the country. However, if the scouting for the land in Gujarat ends up on a positive note, it will be the first executive luxury car marque to establish its plant in the state. This move from the brand is an attempt by the company to compete against the likes of Mercedes Benz, BMW and Audi. Even though the company has been able to offer its products in the country at an aggressive price, the localisation will further help it to reduce costs.
According to a source close to the company, “The company has identified two locations, one in Sanand and other near Chennai. But with the company's major holding in Chinese hands and given growing ties between Gujarat and China, we hope it will be Sanand.” At the same time, the officials of Volvo Auto refused to have zeroed in on Sanand.
Managing Director, Volvo Auto India, Tomas Ernberg, said, “We are looking aggressively at the Indian luxury car market and aim at having a 15% share in the segment by 2020. The decision to identify a location is taken by our team in the US who are looking at the various options. Nothing has been finalized yet.”
