Volvo to start local assembly of cars in India

Volvo Cars, the premium carmaker, announced today that it will start vehicle assembly operations in India in 2017. This positions the company for further growth in the fast-expanding premium car segment in India.

The assembly operations will be located near Bangalore in southern India and focus on models based on Volvo’s SPA modular vehicle architecture. The first Volvo model to be assembled there is the XC90 premium SUV. Additional models slated for local assembly will be announced at a later stage.

In establishing its assembly operations, Volvo Cars is working together with Volvo Group, the truck, bus and construction equipment manufacturer, and will make use of Volvo Group’s existing infrastructure and production licenses near Bangalore. No further contract and financial details will be disclosed.

Volvo’s decision to start assembly in India and market its vehicles as ‘Made in India’ fits well with a similarly named initiative launched by the national government several years ago, which seeks to highlight and promote Indian manufacturing prowess.

While the Indian premium market is still relatively small, it is forecast to grow rapidly in coming years. Volvo currently has a premium segment share of close to 5 per cent and aims to double this by 2020. In 2016, Volvo sold over 1,400 cars in India, an increase of 24 per cent compared to 2015. Year-on-year sales growth in the first four months of 2017 amounted to more than 35 per cent.

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Parichay Malvankar

Parichay Malvankar

Founder, owner and editor-in-chief of www.shifting-gears.com; a born gearhead, nothing apart from a set of wheels gets his pulse racing.