Volvo India looks to assemble all its models locally from next year

The Indian unit of Swedish carmaker Volvo will assemble all its vehicles in India starting next year, in line with the government’s ‘Make-in-India’ initiative to expand its presence in the luxury car market in the country.

“Our sales this year will be lower than 2019. But we expect to continue to gain market share,” Volvo Car India managing director Charles Frump told ET. “Next year onwards we will assemble all our models locally, be in a good position.”

Frump said the move to locally assemble all vehicles it sells in the country will entail additional investment but he did not share the specifics.


At present, Volvo Car India assembles three models—SUVs XC60 and XC90, and sedan S90—locally at its facility near Bengaluru, Karnataka.

Frump said the company has witnessed a steady revival in sales post the Covid-induced lockdown and expects demand to return to normal
during the festive period later this year.

“In May, we were operating at 25% capacity, which increased to 50% in June. We were short only by seven units in July. Customer demand too has improved. The momentum in August is good, we are trying to weigh how much of this is pent-up demand versus actual demand,” Frump
said.

While Volvo is facing some short-term challenges following the Covid pandemic, there is no change in the company’s long-term strategy to develop the market in India, of which electrification remains high on the agenda.

“It is true the tax structure on luxury vehicles is very high here compared to other countries but if the government remains consistent with its push towards e-mobility, it will be very positive for the segment,” Frump said, adding, “Luxury vehicles can lead the electrification drive.”

Volvo Cars India is examining possibilities of introducing electric vehicles from its global portfolio into the country.

The XC40 BEV (battery electric vehicle), for one, has been received well by consumers in Europe and may find its way soon into India. Volvo globally has set itself a vision of selling one million electrified vehicles by 2025, and India as expected to be a key contributor to that.