Volvo India mulling over to setup a plant in India

Volvo India has been thinking about setting up a local assembly plant in India for quite sometime. But the reason they use to convince themselves not to do so is the not so commendable volumes. In fact, during every press conference, Volvo team would be put to the same question and the answer would be a standard fare. With the brand’s cars priced very close to its locally assembled German rivals, the rumors of Volvo opening an assembly plant in India was starting to get more vocal.

Volvo-XC-90

And finally, it seems someone in Volvo India has convinced his team to set up a shop here in India. As per sources, Volvo India is expected to make an announcement regarding setting up a plant here to locally assemble CKD units this week. The plant is rumored to be set up somewhere near Bangalore and in fact Volvo India has already started talks with several Original Equipment Manufacturers (OEMs) in Coimbatore to support its operations.

Volvo India was initially planning to setup the plant with the help of a local manufacturer. But since the discussions were not turning out to be viable, Volvo has decided to play solo and establish the plant all by itself. Still, it is not clear, how much investment the Swedish company is planning to bring in to India.

As per reports, Volvo India is planning to initially locally assemble the 40 series of cars. The 40 series of cars are to be showcased at auto shows later this year with an Indian launch expected by 2019. This does makes sense as Volvo would be launching the new 40 series with XC40, S40 and V40. At the time of launch, Volvo might bring in Completely Built Units (CBU) of these models and might start local production once the assembly line is ready. This is expected to be completed by around 2019 end. Once, the facility is up and rolling, Volvo shall bring its entire lineup of cars in India through the Completely Knocked Down (CKD) kits maybe exept a few hybrid vehicles.

Currently, with a CBU import, Volvo cars are priced on par or cheaper than its German and British rivals. It would be very interesting to see how Volvo keeps the pricing once the CKD route is open.

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