Volvo Auto India, which sells and markets the Volvo vehicle in India, said the establishment of India unit is part of its long-term commitment towards the India market.
The Indian luxury vehicle market stood at around 34,000 units, down over 5 per cent from about 36,000 in 2015. Von Bonsdorff said that with regard to India, the company is bullish about electrified alternatives.
Carmaker Volvo Auto India on Thursday revealed that it would commence assembly of its cars in Bengaluru - at the facility of its "erstwhile parent" Volvo Group located at Hoskote - from the fourth quarter of this year. In 2016, Volvo sold over 1,400 cars in India, an increase of 24 per cent compared to 2015. The company is targeting to introduce the first locally built model in the Indian market by the end of this year. Year-on-year sales growth in the first four months of 2017 amounted to more than 35 percent, according to the company.
Volvo Group India now manufacture Volvo trucks, buses and construction equipment at its Hoskote unit. Volvo now has a market share of 5% in the premium vehicle segment, which the automaker is aiming to double by 2020. The XC 90 would be followed by other models at a later stage, said Bonsdorf.
It will work together with Volvo Group India - the truck, bus, construction equipment and Penta engines manufacturer - to set up its assembly operations in India, the company added.
Volvo's announcement came as General Motors said it will stop selling cars in India, where it has less than a 1 percent share of passenger vehicle sales. The company plans to keep operating its tech center in Bangalore and to refocus its India manufacturing operations by making one of its two assembly plants in India - the one at Talegaon, about 62 miles southeast of Mumbai - into an export-only factory. "Prices should be set according to the value of the auto and that we would not change", Samuelsson said.
"Our target is to double our sales in India in the next 2-3 years and also double our market share in India".