Volvo to assemble cars and SUVs in India from 2017

Volvo Cars has announced that they will assemble cars and SUVs in India with production to begin soon.

Håkan Samuelsson, president and chief executive of Volvo Cars confirmed that the company will commence vehicle assembly in India in 2017. The decision was made due to the growing demand of premium cars in India and Volvo Cars India seeing steady growth in the market. Additionally, Volvo claims the decision was aided by the central government’s ‘Make In India’ initiative which invites foreign investments to manufacture in India.

Volvo Cars will be working together with the Volvo Group which produces trucks, buses and construction equipment. Volvo Group already has a manufacturing facility near Bangalore. Volvo Cars will make use of the existing infrastructure. However, Volvo has refused to comment further regarding the contract and investments.

The first Volvo vehicle that will be produced in India will be the Volvo XC90 premium full size SUV. The assembly operations in India will focus on models which will be based on Volvo’s SPA modular vehicle architecture. Other models which are to be locally assembled for the Indian market will be announced at a later stage.

[caption id="attachment_98265" align="alignnone" width="642"] Håkan Samuelsson, President CEO Volvo Car Group[/caption]

Samuelsson stated; “I am pleased that as of this year we will be able to start selling Volvos that are Made in India. 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 is headquartered in Gothernburg, Sweden and is currently owned by a Chinese company – Geely. The facility in Gothenburg is where the company’s research and development and Safety Centre is also located. Volvo also has a test track in Hällered, Sweden. The company manufactures and assembles vehicles in Torslanda, Sweden since 1964, Ghent, Belgium since 1965, Kuala Lumpur, Malaysia since 1967, Chengdu, China since 2013 and Daqing, China since 2014. While the operations for its upcoming facility in Charleston, South Carolina, United States will begin in 2018, Volvo’s assembly operation in India will begin this year.

The Indian premium market is relatively small, however, it has been forecasted to witness rapid growth in the near future. Currently Volvo competes with Mercedes-Benz, BMW, Audi, and Jaguar Land Rover in the Indian market. The recent demand for premium vehicles forced Toyota to also bring in their premium brand Lexus to India with a range of models to offer.

Volvo currently holds a small share of 5% in the premium segment in India, and Volvo now plans to double that by 2020. In 2016, Volvo sold over 1,400 cars and SUVs in India with a growth of 24% in correspondence to the previous year. Volvo claims that the year-on-year sales in the first four months of 2017 has amounted to more than 35% increase. With Volvo now assembling products in the Indian market in Completely Knocked Down (CKD) form, will reduce the import duties Completely Built-up Unit (CBU) vehicles attract. This will bring down the prices of locally assembled Volvo models which are already competitively priced in the Indian market.