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Volvo India Plans To Locally Assemble Vehicles
The luxury market in India is growing at a rapid pace and the market is currently dominated by the German manufacturers. The three Germans Mercedes-Benz, BMW and Audi are the luxury car manufacturers. They have realised the importance of the Indian market and have set up their local facilities for assembly and production.
A local assembly is important for luxury car manufacturers, who import their vehicles to India. The import of vehicles in India attracts huge taxes and increases the price of vehicles. Volvo India now plans to introduce a new local facility to make their vehicles more affordable.
The Swedish manufacturer has been selling its vehicles in India via the Completely Built Unit route, which attracts heavy taxes. Volvo India would like to get Completely Knocked Down units to India, thus lowering the price and offering the benefit to its buyers.
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Volvo currently offers the XC60, XC90, S60, S80 and the V40 Cross country in India. All these vehicles are brought to India as CBUs and attract roughly 170 percent taxes. If the vehicle is bought as a CKD the company has to pay a tax of only 30 to 40 percent.
The Swedish manufacturer has been selling its products in India for a while now. It has not been able to create an impact with the local market and is a reason for the poor sales. Now with a plan to locally assemble its vehicles perhaps they could take a bite from the German's.
Volvo is known for producing one of the safest vehicles in the world. We believe they should use this sentiment to promote their products in India. They have always been pioneers in the safety department and are highly credited by EURO NCAP. If Volvo India wants to dent the shares of the German trio, they should do something soon.
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