Volvo to assemble cars in Bengaluru from year-end

Carmaker Volvo Auto India on Thursday revealed that it would commence assembly of its cars in Bengaluru —  at the facility of its ‘erstwhile parent’ Volvo Group located at Hoskote — from the fourth quarter of this year.

The Swedish company would begin by assembling the luxury XC90 D5 diesel SUV, for which CKD kits will be sourced from Sweden. The XC90 is among Volvo’s most expensive car ranges, but provides for a fourth of its sales in India. “The plan is to double our luxury premium segment share to 10% by 2020, from the current 5% in India. We expect to sell about 2,000 cars this year. Currently, the segment is to the tune of 35,000 cars, which could touch 50,000 cars by 2020,” Volvo Auto India Managing Director Tom von Bonsdorff said.

“According to our contract manufacturing arrangement, we’ll use Volvo Group’s existing infrastructure in Hoskote, where we’re setting up our facility. The idea is that while we have been importing CBUs, we are vulnerable to certain policy or regulatory changes. This is a good way to reduce our risk level in the country, as we are in line with Make in India,” von Bonsdorff said.

It must be noted that Volvo Group sold Volvo Cars to Ford in 2000, which was finally acquired by current owner Geely Automobile of China in 2010. Nonetheless, both ‘Volvos’ share similar core values, and von Bonsdorff believes that the arrangement would be beneficial. Also, this is the second facility for Volvo Cars globally, after one in Malaysia, where knocked down vehicles are assembled.

Talking to DH about future plans, von Bonsdorff said, “In terms of assembly, we’re looking at the XC90, and will then successively add other models. For us, it’s really important to grow our network in order to increase sales. Right now, we have 17 showrooms in operation across India, and this quarter, we will open four showrooms across Pune, Lucknow, Delhi and Ludhiana. We eye 25 outlets by this year-end.”

Meanwhile, Volvo will launch the V90 Cross Country this year, while it also expects to launch the new model of the XC60. Von Bonsdorff said that with regard to India, the company is bullish about electrified alternatives. “We just launched the XC90 Excellence plug-in hybrid. Going forward, we will have hybrids on all our models globally, and expect to bring in as many of them to India. This is dependent on the incentives and policies of the government,” he added.