Volvo Cars considering local assembly in India

NDTV reports that Volvo cars is looking at setting up local assembly operations in India. Volvo has highly ambitious plans to sell 20,000 cars in India by 2018. It'll be a tall order to compete with Mercedes, Audi & BMW at the same price points. Last year, BMW sold 9,375 units, followed by Audi with 9,003 units and Mercedes selling 7,138 units. Jaguar Land Rover managed to sell 2,288 units in the same period. In comparison, Volvo sold merely 821 cars (compared to 320 units in 2011). Volvo's India boss - Tomas Ernberg - said that the company is targeting sales of 1,100 units this year. 

Since its entry in India, Volvo has been importing its offerings through the CBU route. This approach has been dealt a blow with the excise duty hike of 25% in the budget. NDTV has reported that Volvo AB (commercial vehicles) could provide support through its manufacturing facility in Bangalore. 

The Volvo car division is owned by Chinese automaker Geely, the only ties with Volvo AB being the name and logo. This would make plans for sharing of facilities time consuming and they could take some time to fructify (if at all matters proceed). 

Volvo targeted High Networth Individuals in India through partnering with events such as the Volvo World Golf Challenge and Lakme Fashion Week. This approach seems to have helped the company, indeed Volvo says that it climbed to second place in luxury car sales in Hyderabad last year. Volvo is now planning a similar approach in Bangalore. 

Volvo's biggest obstacle is low brand aspiration among Indian car buyers.