Volvo Car India open to India partner in the future

Martin Persson, head of Volvo Cars for the Asia Pacific (excluding China), said the company's current focus is solely on its Bengaluru facility. 

“While we acknowledge the complexities surrounding ownership, that is an issue for the future. We will address it when the time comes," he said, replying to a question from Mint on the need for an Indian partner on the sidelines of a media interaction on Wednesday.

The Swedish passenger car manufacturer has a plant at Hoskote near Bengaluru, where it locally assembles all its models in India, namely the XC90, XC60, S90, XC40 Recharge, and the C40 Recharge.

Volvo Cars India is a wholly owned subsidiary of Sweden's Swedish automaker group Volvo Cars AB. However, Chinese conglomerate Zhejiang Geely Holding Group Co. Ltd owns a 78.7% stake in the Volvo passenger car group firm, which doesn’t align well with the Indian government.

In 2020, amidst escalating border tensions with China and the covid-19 pandemic, the Centre had imposed new restrictions on foreign direct investment (FDI) to prevent opportunistic takeovers of Indian companies. A press note was issued restricting investments from China, possibly including Hong Kong and other neighbouring countries, without prior governmental approval.

Also read: Volvo Cars India aims to go fully electric ahead of 2030 global target

Consequently, this led MG Motors, previously majority-owned by Chinese stakeholders, to form a joint venture with Indian partner Sajjan Jindal’s JSW. 

The market potential

Volvo is confident in the potential of the country as it aims to unveil one electric vehicle annually and achieve a fully electrified vehicle portfolio by 2030. The company has scheduled the release of the EX90 and EX30 in the next two years.

Martin believes that the country has the potential in the coming few years to be a significant market in Asia Pacific, but perhaps not on the same level as Japan and Korea, but getting there.

“India is my smallest market in the region, but I don’t think it will stay that way. I would expect higher growth in India than the rest of the region," he added. “Indian consumer behaviour is similar to Japan and Korea. Indian contribution to the region's growth is not so high, but the plan is to make it a significant player in the APEC region."

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Volvo's India plans

Volvo Car India plans to achieve this by investing in its brand in the country, elevating the dealer network, enhancing consumer experience, and digitalizing the consumer journey. The company has 25 outlets in India and earlier this year rolled out the 10,000th domestically assembled vehicle in the country, a feat achieved over six years of beginning assembly operations in the country. It began local assembly of Volvo cars and SUVs in 2017.

Volvo Car India registered a 31% increase in overall sales in 2023 compared to the previous calendar year. The company delivered 2,423 cars in 2023 compared to 1,851 units in 2022. Out of the total sales for 2023, the company sold 690 EV units, comprising 28% of the total sales.

In the luxury segment of EVs, Volvo holds a 24% market share, securing the second position in India, after BMW. “The company is also taking major steps to bring E20 or ethanol-compatible engines, where it will try to bring the XC60 and XC90 onto that," added Martin.