Friday, June 23, 2017  
21 June, 2015 at 01:33 PM
Volvo cars ideal for Indian roads
Tom von Bonsdorff
Volvo Cars churns out Scandinavian beauties loaded with plenty of safety gear. But its report card in India has not been that great despite the fact that the Swedish luxury carmaker has been around in the country since 2007. That’s huge surprise for many because Volvo cars are known for their safety gear globally while India has earned worldwide notoriety for its unsafe roads. That means luxury car buyers in India should flock to Volvo showrooms as they would obviously want to live longer. But that’s not happening. And the fault lies with the Goteborg, Sweden-based carmaker as it failed to drive home the message of its safety pedigree in India. However, Tom von Bonsdorff, the newly-appointed Managing Director of Volvo Auto India, may go for a course correction on this. “It’s true that there are lots of fatalities on Indian roads. That’s one of our potentials to grow (here). We come out with what we believe the safest cars. So, we definitely want to be perceived as the world’s safest brand,” Bonsdorff, a Volvo veteran of 17 years, tells in an exclusive interaction.


What’s your take on Indian luxury car market?
India is a huge country and a continent in itself. So, it is obviously a challenging market to deal with. Other interesting point for us is that premium cars account for just one per cent of the total cars sold in the country. That means despite being a huge car market, it’s not big one for premium cars yet. Globally, it’s an established trend that premium cars tend to take market from other segments. Therefore, I am confident that Volvo brand will continue its growth path in India. Our aim is to be one of the growing luxury automotive brands in India. Also, we have plans to increase our market share.

Your rivals such as Audi, BMW and Mercedes-Benz are doing pretty well in the country. What’s the long-term strategy of Volvo Cars for the Indian market?
Premium car market is fairly small in India now and so, nobody has grown to sell in huge numbers. Therefore, we haven’t lost any opportunity yet. Volvo is on the right track of growth. What we need to do is to make our brand well-known and bring in good quality products. I’m sure growth will start from there.   

Volvo Cars is known for the safety gear it offers in the models while India is well-known for its unsafe roads. Still, Volvo has failed to cash on its safety pedigree and emerge as dominant player in the India’s luxury automotive space. Why is it so?
You have made a good point. Thank you for the feedback. We really need to do more if that’s the perception in India. Volvo Cars is always known for safety as well as luxury features everywhere. You are right. There are lots of fatalities on Indian roads. That’s one of our potentials to grow (here). We come out with what we believe the safest cars. So, we definitely want to be perceived as the world’s safest brand.

All of your rivals including Jaguar Land Rover have set up assembling facilities in India to rein in production expenses. How long will you take to set up your facility in the country?

As of now, there are no plans to establish our manufacturing facility in the country. We have our own way of working and strategies and our competitors have their own. They do have assembly plants. But everyone has same opportunities in the country. We are quite happy with the kind of setup we have in India and we are confident that we can grow with the current setup.

You import all the models as completely built units (CBUs) into India. Still, most of Volvo models are priced competitively despite the fact that import duties are very high. Is the Swedish luxury carmaker incurring losses on the models it sells in the country?
Volvo Cars can’t make inroads into any market if it can’t price the models competitively. Car manufacturing is a complicated process and production expenses also differ from place to place. However, it depends on models. As of now, our strategy is to continue the CBU route. Of course, we will always monitor our strategy and change it according to the market needs.

As you are aware of, the compact luxury SUV segment is doing pretty in the country. Does Volvo Cars plan to foray into the fast-growing segment?
Right now, we have no plans to launch a compact SUV in India. And we are very happy with our current lineup. At present, we have two SUVs – Volvo XC60 and XC90 – in our Indian lineup and they are doing well. Sometime back, Volvo launched V40 Cross Country. We also brought in V40 hatchback recently. We expect V40, which we priced aggressively from Rs 24.75 lakh ($40K), to generate good sales as it competes in compact luxury car segment which accounts for a third of total luxury cars sold in the country. No doubt, the hatchback will be one of the growth drivers for us here.

Chinese automaker Geely owns Volvo Cars now. Has this Chinese association impacted negatively on the brand image of Volvo?

Obviously, we face this interesting question from time to time. But I can honestly say that we are happy about the Chinese ownership. In the history, some car ownerships haven’t been so successful when they tried to integrate too much, share platforms and share components in different cars. The Geely ownership is very much financial. It is the fact that Volvo has never been as independent as it is now. Though owned the Chinese company, Volvo has international management and Swedish CEO. The design and engineering are also done in Sweden. Our main plans are located in Sweden and Belgium. The Chinese owner has given us an opportunity to invest in new products. And we don’t see any reason to lower quality. We are quite happy about the ownership.

Read More On : Volvo Cars , luxury cars , India , Q&A
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