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Volvo plans to ramp up luxury car market in India with the launch of compact models

Economic Times:  May 23, 2016

Gothenburg: Swedish carmaker Volvo Car Corp is seeking to step up its play in the luxury car market in India with the launch of a series of compact models starting next fiscal year.

The initial models in this category to hit the road will be a sport-utility vehicle codenamed Concept 40.1 and a sedan currently called Concept 40.2. Volvo, which unveiled the 40 series compact cars at its headquarters in Gothenburg, Sweden, last week, will pit these against rival auto maker's entry-level luxury models such as BMW X1, Audi Q3, Audi A3 and Mercedes-Benz GLA to gain volumes in a market driven by young urban customers.

Entry-level luxury cars from German manufacturers are priced upwards of Rs 26 lakh in the Indian market. "Entry SUVs are extremely important for a market like India," said Peter Mertens, senior vice-president for research & development. "We are seeing a lot of growth coming in from the segment in BRIC (Brazil, Russia, India and China ) countries. Also, in the Americas, the trend has become apparent."

Both concept cars will go into production in Ghent, Belgium, in 2017. The India launch will take place within six to eight months of commencement of global deliveries.

Apart from the SUV and the sedan, the car maker will also develop a hatchback under the 40 series. Volvo has decided to have newer energy alternatives for all car lines developed on the new common module architecture (CMA) platform.

"The platform has been developed ground up for electrification. We can develop plug-in hybrids as well as fullelectric vehicles with a range of 350 km on it," said chief executive Hakan Samuelsson. Volvo aims to have a million electric vehicles on road by 2025.

In India, the Swedish car maker is gearing up to launch a hybrid version of SUV XC90 in the next few months.

"Globally, the T8 (hybrid version) accounts for around 20 per cent of XC90 sales. In markets like India and China, infrastructural constraints as far as charging these vehicles are concerned is a challenge," said Mertens, the R&D executive.

The 40 series cars are based on a new platform which Volvo will share with Chinese owner Zhejiang Geely Holding Group and is a part of Volvo's strategy to boost sales to 8,00,000 units per annum by 2020.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.