Volvo is mulling the prospect of setting up an assembly plant in the country and is currently conducting a feasibility study in this regard. The Swedish carmaker hopes to increase its sales in the sub-continent to 20,000 units a year by 2020. It also aims to nearly double its global sales from 440,000 units to around 800,000 units by the year 2020.
"It makes sense to set up a car manufacturing facility in India as we target sales of 20,000 units by 2020 here. A group within Volvo is conducting feasibility report of setting up a facility in emerging economies including India," said Volvo Auto India managing director Tomas Ernberg.
The company has also said that it will hike the price of all the cars in its range by up to five per cent with effect from next month and will make an announcement in this regard shortly. It has attributed the hike to inflation and rise in import costs.
In terms of expansion plans, Volvo aims to have 13 dealerships across the country by 2013 and recently opened its eleventh one in Ahmedabad. The dealership will be run in partnership with Autobots and the company hopes to sell around 150 cars next year in one of India’s wealthiest states.
The Swedish carmaker currently imports all its models via the CBU route and has to price them very competitively as it does not have a very good hold on the luxury market like many of its European rivals. This is a factor that is hurting its profit margins quite badly. The setting up of a local assembly plant would greatly aid in regard.