Swedish automaker Volvo has announced that it will start vehicle assembly operations in India in 2017. The company is looking to tap into the growing premium car segment in the country.
The assembly operations will be carried out in Volvo's facility in Bangalore. The project will focus on models based on Volvo's SPA modular vehicle architecture. The first model to be assembled is the XC90 premium SUV.
Additional models are also planned to be locally assembled and will be announced at a later stage. Volvo Cars are working together with Volvo Group India and Penta engines manufacturer to commence assembly operations.
Volvo will make use of Volvo Group India's existing infrastructure and production licenses near Bangalore. No further contract and financial details will be disclosed.
President and Chief Executive of Volvo Cars, Håkan Samuelsson said, "I am pleased that as of this year we will be able to start selling Volvos that are Made in India. Starting vehicle assembly in India is an important step for Volvo Cars as we aim to grow our sales in this fast-growing market and double our market share in the luxury segment in coming year."
Managing Director, Volvo Auto India, Tom von Bonsdorff said, "We are delighted to announce the commencement of local assembly unit. Each locally assembled Volvo Car will have same International standards as anywhere else in the world. With our continued efforts we are sure to build a strong foundation for our business in India."
Currently, the luxury vehicle market in India is relatively small. But it is expected to grow at a rapid pace in the coming years. Volvo has a premium market share of 5 percent and aims to double it by 2020.