Swedish car giant Volvo, which is owned by Geely of China, has been intently vying for a sizeable 10 per cent market share in India by 2020.
Currently, Volvo Cars has a 3.5 per cent segment share in the luxury car market in India, compared with the 1 per cent it held three years ago. In 2011, the company managed to sell just 330 units, which by 2014 has grown to an impressive 1,202 units.
“Gradually, we are moving our segment share to 5 per cent. We are aiming to have a 10 per cent segment share by 2020. We believe we are on track and it’s achievable,” Volvo Auto India Managing Director Tomas Ernberg said.
The company has been bullish in rolling out new products as it pushes to mark a presence in every niche of the luxury car market. Volvo Auto India has been retailing products in an array of categories — crossover, sedan, saloon and SUV — which include the S60, S80, V40 Cross Country, XC60 and XC90.
“The SUV and crossover segment is gaining popularity in the Indian car market and we have the right products in the pipeline to capture the trend, starting with the new XC90 scheduled to be launched in India, later this year. Besides, a few variants of the V40 Cross Country and S60 T6 Petrol will follow,” Ernberg told Deccan Herald.
The Indian luxury car market is considered to be one of the fastest growing markets worldwide, but it is also one of the smallest. “The current average global penetration of luxury cars is over 10 per cent, while in Europe it’s around 25-30 per cent. In India, the penetration is approximately 1-1.5 per cent of the total industry volumes, making it one of the smallest luxury car markets in the world,” he said.
Volumes to hit 1.5 lakh
Today, around 33,000 luxury cars are sold in India of the total 2.5 million cars. This penetration was around just 5,000–10,000 cars, six years ago, which Ernberg said would grow to 3 per cent by 2020.
“The year 2015 promises to pose a 15-20 per cent growth over 2014, with expected volumes to be around 38,000 units,” he said. In absolute terms, the total industry volumes is expected to be close to 5 million units and the luxury car volumes to touch around 150,000 units from the current 30,000 units.
But Volvo is hopeful of growth here. “The year 2015 has begun with a promising start for us with our sales trend on track to pose a 66 per cent growth over 2014. We are aiming to sell over 2,000 cars this year, with our network expansion supporting volume targets,” he added. It is eyeing smaller cities like Jaipur, Udaipur, Vijayawada, Madurai and Bhubaneswar for dealership expansion, besides new outlets at Vadodara and Rajkot.
Referring to Volvo’s CBU strategy in India, Ernberg stated, “In a price sensitive market like India, with a targeted annual sales of 20,000 units, it is imperative for any car manufacturer to have a production unit here. And it entails a certain amount of investment. However, for any investment to turn viable, we must first achieve a certain base.”
