Volvo Ties Up With Modi For Luxury Car Line

The $28 billion Swedish conglomerate AB Volvo has tied up with Modi Motors in Delhi for marketing its line of luxury cars Volvo S70 and S90.

The cars have been priced around $30,000 (around Rs 12 lakh) for select customers like corporates and tourist industry.

Volvo plans to make use of government relaxation in import of cars for diplomatic missions, etc.

Volvo has already marketed around 100 luxury cars so far in India.

The response for direct import of its luxury class models into Indian markets is expected to lead the automobile giant into considering assembling some of its well-known international models here with semi knocked down or completely knocked down at a later stage.

 

However, while ruling out immediate plans to go for local assembly or entering of passenger car manufacturing in India, Volvo president and CEO Leif Johansson said here that if volumes go up Volvo might consider assembling cars by using semi knocked down or completely knocked down kits.

The heavy import duty in India doesnt hold too good a promise for assembling cars here and to enter full-fledged manufacturing, volumes must go up, he said.

He was here to address a meet organised by the Confederation of Indian Industry.

Volvo Cars, the $ 12 billion business segment which is the largest in the Volvo group, holds a strong position in the family segments and is a leading manufacturer of station wagons.

The product programme comprises Volvo S 90 and V 90, Volvo S 70 and V 70, Volvo S 40 and V 40 and the recently-launched C 70 Coupe and C 70 Cabriolet.

With too many players already in the fray in Indian car market, Volvo said it had no plans of entering the high volume car business.

The overrun capacity has dissuaded it from investing in this segment.

Volvo has set up a heavy commercial vehicles manufacturing unit near Bangalore with a total outlay of $300 million over two phases, with initial investment being $80 million.

Johansson said that the Indian unit plans to roll the first truck out of its upcoming new facility near Bangalore in June 1998. Volvo Truck Corporation plans to introduce the same models which are being launched in Shanghai, China. The group is the second-largest producer of heavy buses in the OECD market. The Swedish multinational has already lined up a massive plan for India.

This includes construction equipment and industrial engines business and setting up a separate unit for producing passenger buses with an initial investment of Rs 50 crore.

Besides, it has also signed an memorandum of understanding (MoU) with Karnataka government for jointly producing passenger buses.

It plans to form a separate unit for manufacturing its 10-litre B10-M engine buses after a feasibility study it has commissioned is complete.

The location will be decided at a later date, company sources said.

The group has decided to enter construction equipment business in India through Volvo Construction Equipment for its haulers and excavators and other construction equipment.

The group had recently undertaken a market survey in India for these products and expects to take a major decision on this in the near future.