Volvo says no to luxury car manufacturing units in India

The Swedish auto maker Volvo seems to be going against the wind. Reason: Despite no change in the completely knocked down (CKD) rules, the company is said to have shunned all its plans to set up a manufacturing unit for its luxury products in India. Contrary to Volvo, all the other major international auto giants have reportedly started thinking on establishing their plants in India. Terming it to be unfeasible, Volvo India is said to have said that it had no plans of setting up a production unit in India in the near future.

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After the recent no change in the completely knocked down (CKD) rules in the budget, it was expected that India would become a small car hub. Volvo is also said to have said that the Rs1 lakh to Rs5 lakh segment cars are not in its agenda and is not in sync to its brand image. However, the company may consider channelizing money in the alternative fuel-powered cars.

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The company has recently launched Volvo C30 Electric in Europe. Commenting on the prospects of introducing similar cars in India, the company is said to have said that it will think over it once there is ample demand and necessary infrastructure is in place. It is hoped that the company may think on this following lower duties on such cars.   

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In India, there are immense possibilities in the luxury segment and the small car segment. Volvo’s luxury cars including Volvo S 80, Volvo S60, crossovers Volvo XC90 and Volvo XC60 are in India besides other models and are in straight competition to Skoda Superb, BMW 3 Series, Audi A4, Mercedes Benz new C Class.

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Notably, the luxury car market in India is perhaps growing at the rate of 35 percent annually. Volvo India has grown by 200 per cent since its inception in India and the company hope to sell around 400-600 cars this year.

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