Volvo Cars to start assembly operations in India this year

Volvo Cars to start assembly operations in India this year

To begin with, Volvo XC90 will be the first vehicle from the company's product portfolio to be locally assembled in India.

The assembly operations, to be located near Bangalore, will focus on models based on Volvo's SPA modular vehicle architecture.

Volvo, the Swedish automaker of luxury cars, has now announced that it will commence local assembly operation in the Indian auto market, starting this year itself. The first locally assembled XC90s should roll out of the Bengaluru factory by the end of this year, said top company officials. It's a sign of the company's strong commitment to India. "We have decided to make in India because we see India as a potential future growth market particularly in the premium SUV segment".

It will start assembling its premium SUV XC90 and has entered into a contract manufacturing agreement with Volvo Group India to use the latter's existing infrastructure near Bengaluru and production licence.

"The operations will be near Bengaluru where our first model XC90, a premium sports utility vehicle, will be assembled and rolled out this year to grow in the expanding premium auto segment", Volvo Cars Chief Executive Officer Hakan Samuelsson told reporters in Bengaluru.

For Volvo Cars, sales in India are at 1,500 units per year and "it is too small, primarily because of the restrictive import regulations", he added.

"Each locally assembled Volvo Car will have same global standards as anywhere else in the world", he added.

Financial details of the deal were not disclosed.

Volvo Group India now manufacture Volvo trucks, buses and construction equipment at its Hoskote unit. "Volvo Cars in India had a 32% growth in sales volumes in the past two years and the 2017 trend is as per our plan to achieve 2000 cars, this will give us a growth of 25% y-o-y", Bonsdorff added. Volvo Auto India now has a premium segment share of close to 5 percent and aims to double this by 2020.

Volvo now sells nine luxury models in India, including sports sedan Volvo S60, performance sedan Volvo S60 Polestar, premium sedan Volvo S60 Cross Country and luxury hatchback Volvo V40.

So far, Volvo Cars India has been importing models from Belgium and Sweden.