In establishing its assembly operations, Volvo Cars is working together with Volvo Group India - the truck, bus, construction equipment and Penta engines manufacturer, and will make use of Volvo Group India's existing infrastructure and production licenses near Bengaluru.
The assembly plant is located near Bengaluru, and the first model to be assembled there will be Volvo's flagship SUV, the XC90.
"The operations will be near Bengaluru where our first model XC90, a premium sports utility vehicle, will be assembled and rolled out this year to grow in the expanding premium auto segment", Volvo Cars Chief Executive Officer Hakan Samuelsson told reporters in Bengaluru.
Last year, Volvo Auto India sold almost 1,600 units. With the launch of new cars this year, the company is going aggressive on both the product and network expansion side.
Volvo Cars has a premium segment share of roughly 5 percent, and aims to double it by 2020.
The Indian luxury vehicle market stood at around 34,000 units, down over 5 per cent from about 36,000 in 2015.
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Volvo Cars now has 17 showrooms and plans to add four more in Pune, Lucknow, Delhi and Ludhiana in 2017.
Volvo said it will announce later which models are slated for local assembly in addition to the XC90.
Mumbai: Swedish luxury vehicle company Volvo Auto India Pvt. "This is a good way to reduce our risk level in the country, as we are in line with Make in India", von Bonsdorff said.
"I am pleased that as of this year we will be able to start selling Volvos that are Made in India", said Håkan Samuelsson, president and chief executive of Volvo Cars in a statement.
GM will not leave India entirely. "Prices should be set according to the value of the vehicle and that we would not change", Samuelsson said. The contract manufacturing keeps investments in the assembly operations low and allows the company to be more aggressive in terms of margins and profitability in the Indian market.
Stefan Jacoby, GM's chief of global operations, said the move to turn the Talegaon assembly into an export-only plant will not impact GM Korea and its position as an export hub. It expects sales to advance 25% to 2,000 units this year over the year-ago period. The Talegaon plant has a capacity of 130,000 vehicles a year.