Volvo Cars sets up assembly plant in Bengaluru, India to roll out first vehicle in 2017

Thursday, May 18, 2017

Swedish auto-maker Volvo Cars will start local vehicle assembly operations in India in 2017, the company confirmed in a press release.

Volvo Cars’ assembly unit will be located near Bengaluru, Karnataka and focus on models based on Volvo’s SPA modular vehicle architecture. Volvo XC90 SUV will be the first product to be locally assembled. Additional models slated for local assembly will be announced at a later stage.

This positions the company for further growth in the fast-expanding premium car segment in India.

Volvo did not announce any investment details but added that the company is working together with Volvo Group India - the truck, bus, construction equipment and Penta engines manufacturer, and will make use of Volvo Group India’s existing infrastructure and production licenses near Bengaluru.

“I am pleased that as of this year we will be able to start selling Volvos that are Made in India,” said Håkan Samuelsson, President and CEO of Volvo Cars. “Starting vehicle assembly in India is an important step for Volvo Cars as we aim to grow our sales in this fast-growing market and double our market share in the luxury segment in coming years.”

"We are delighted to announce the commencement of local assembly unit,” said Tom von Bonsdorff, Managing Director, Volvo Auto India.

“It’s a sign of the company’s strong commitment in India. Backed by a robust sales growth, expanding network and an array of new product launches the local assembly will provide us an impetus to garner a sizeable segment share in the medium to long term. Each locally assembled Volvo Car will have same International standards as anywhere else in the world. With our continued efforts we are sure to build a strong foundation for our business in India.”

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.

Volvo Cars believes that while the Indian luxury market is still relatively small, it is forecast to grow rapidly in coming years. The company's current market share in the premium segment is about 5% and aims to double this by 2020. Volvo Cars in India have had a robust 32% growth in sales volumes in the past 2 years and aims to sell 2000 cars this year at a growth rate of 25% year-on-year.