Volvo, the Swedish luxury car maker may not be a brand as popular as Audi or BMW but the brand brings the safest luxury cars to the table. There is a certain section of the luxury car buyers that loves Volvo cars and to further increase the appeal of the brand in the Indian market, Volvo is considering Volvo cars local assembling in India which will not only make Volvo cars cheaper, but also help the brand get a strong footing in the Indian market. This is not the first time, Volvo has been considering this plan for a long time, but after the recent hike in the duties on the imported luxury cars, it seems to have give Volvo all good reasons to move fast with its India plans.
The Budget 2014-15 was not rosy for the automobile industry and the import duty on cars which were brought in as CBUs was raised to 100 percent from the current 25 percent. Volvo brings all its cars via the CBU route in the country and increase in the duty will result in an increase in the prices of cars, which will consequently result in lower sales. That is the law of demand and it will dent Volvo’s sales big time.
Volvo is all set to launch their most affordable car till date, the V40 in India around May and seeing that it will be brought through the CBU route, the car might get a steep price tag too. Also Volvo has plans of launching the facelifted versions of the S60,S80 and XC60 in India later this year. This is because India gets the cars as CBUs so if the global model gets a facelift, so does the Indian model of the car.
Volvo is currently witnessing a tremendous growth in the country and will seek to compete with the German brotherhood once it has all its products in the Indian market. But if it continues to follow the CBU route, that growth it has been witnessing will be in for a toss. Volvo is also considering India as an export hub for Volvo cars so the CKD assembly line might make a lot of sense for the company as well. We hope the top guns at Volvo are hearing us.
Mr. Tomas Emberg MD of Volvo auto India said that “We are competing against stronger German rivals who have put up a huge distribution network that’s aided by local plants to roll out cars at lower taxes. But we have to import cars by paying higher taxes. So, it’ll make sense to assemble our cars locally to pass on the benefits to our customers and increase our share in the Indian market”. Volvo has a plan of going high for consumer satisfaction and provides them the best of the best. A supporting statement added by the Volvo auto India MD. Mr. Tomas Emberg discloses “We are realigning our dealership network as well as introducing new products with smaller and fuel-efficient engines”.