Volvo Setting Ambitious Sales Goals in India

MUMBAI – Volvo India sold 820 cars here in 2012, but the Swedish auto maker’s subsidiary is setting its goal considerably higher than that.

“We aim to sell 20,000 cars by 2020,” Managing Director Tomas Emberg says.

That would be roughly a 13% share of the country’s luxury-car market, which is expected to reach 150,000 deliveries that year. Volvo’s India sales target for 2013 is 1,200 units.

Volvo’s cars are imported into India completely built-up and are subject to a 113% duty. Prices of the S60 and S80 sedans range from Rs3 million-Rs5.0 million ($54,550-$90,900). The XC60 and XC90 SUVs are priced at Rs4.5 million-Rs6 million ($81,800-110,000).

However, in line with other auto makers here, Volvo plans to is raising its prices about 5% this year, says Sundeep Narayan, director-marketing. The auto maker also may begin importing the V40 Cross Country by March.

Volvo is focusing on emerging countries to double its global sales to 800,000 units by 2020, he says. As part of this strategy, it plans to co-develop an assembly plant at Sanand in Gujarat state with Tata and Ford India. Lower prices will result from reduced taxes on vehicles assembled in India.

The auto maker has no plans to export vehicles from India once the Sanand plant comes online, but its standard- and long-block truck and bus engines are used in Volvo vehicles worldwide.

Volvo buses and trucks have been built in India since 2008 through its joint venture with Eicher Motors, known as VE Commercial Vehicles. They use advanced engines and a new medium-duty engine is expected to be brought in soon. The JV has annual capacity of 1,000 units, which is being raised to 2,500 through an additional investment of Rs4 billion ($73 million).