02 July 2007

Volvo Prepares Additional Car Offering In India

Recently, the Indian auto market has been one of the most talked about in the auto industry. The country’s economy is picking up which means more individuals can afford to buy new cars. In fact, it is expected that the country will become the third largest auto market in a few years time. That is why car manufacturers are already laying down their plans for expanding their presence in the Indian auto market.

Volvo Cars and Ford recently announced that they will be working together in expanding their presence at the aforementioned country. It has been reported that Ford will be focusing on the mid-size segment of the Indian auto market while Volvo will compete in the upscale segments. It was initially reported that Volvo will be offering the XC90 and the S80 as well as providing aftermarket service and repair by providing reliable XC90 and Volvo S80 parts in their entry to the Indian auto market.

Recently, the Swedish car company known for manufacturing safe cars announced that they are finalizing their lineup for the next few years. “The logical thing would be to bring in another sedan. We haven’t decided on the model yet, but it could be S40 or S60,” says Paul de Voijs, the managing director of Volvo Cars India. “We are also considering bringing in hatchbacks - C30 and C70. Our new SUV, due in 2009, could be also brought-in here,” he added further.

Volvo Cars India is currently operating in the country as a division of Ford India. While that may be the case, de Voijs said that the pricing, marketing, network selection and product introduction will be handled by Volvo Cars alone. “We will take Ford’s support in back-office operations like HR (human resources), homologation, IT, logistics, and accounting, but Volvo Cars would remain responsible for products, pricing, and marketing,” said de Voijs.

Volvo pointed out that they are not planning to assemble Volvo vehicle in India. Instead, they will be importing the vehicles that they will market in the country as CBUs or completely built units. This step is unlike the plan announced by Nissan where the Japanese car manufacturer announced that they are planning to make India a production hub for auto parts.

In China though, Volvo put up an assembly facility where they produce Volvo vehicles they market in China. Last year, Volvo reported that they have sold 8,000 units in the country. The same volume of vehicles is what Volvo expects to sell in India.

The three engine choices for the S80 and the XC90 are currently being tested whether they meet the safety and emission standards set by the Indian government. This homologation process is expected to be completed by August this year. Upon completion of the said process, Volvo will announce when they would launch the XC90 and the S80.

When all the preliminary processes leading to the launching of the XC90 and the S80 are completed, both the luxury car and the midsize luxury crossover SUV will hit showrooms on three select cities in India. These cities are Delhi, Mumbai, and Chandigarh. “It is our deliberate strategy not to start with 12 cities at the same time. Moreover, these three cities represent more than half the country’s potential,” said de Voijs.

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