Swedish luxury carmaker Volvo Cars, which is yet to make its presence felt in the Indian market, said it is preparing a ‘comprehensive plan’ to become a meaningful player in the country.
According to Martin Persson, Head of Volvo Cars for the Asia Pacific excluding China (APeC), the Indian market holds enormous potential for the Swedish car maker, but it’s something that the company will have to work hard to realise.
“It will not come to us automatically. We need to take certain steps and work with different things to capture that potential,” he said, adding that the company is working on a plan to achieve this.
“It is going to be a comprehensive plan, and not one single bullet. It is about investing in our brand in India, expanding the dealer network, and digitising the consumer journey, among others,” said Persson, who was in New Delhi on a visit to understand the potential offered by the domestic luxury car market for the Scandinavian brand.
Volvo, which has substantial operations in markets such as Japan and Korea, does not have any manufacturing operations in India. Between its five CKD-assembled models, the Swedish brand sold 2,423 units in India in CY2023. This, however, represented a 30% increase over the previous year.
Electric Focus
Globally, Volvo has a strong focus on the electric market, which is also reflected in two out of the company’s five models in India being electric. The brand plans to bring one new EV to India every year for the next few years as it executes its strategy of turning its entire global portfolio electric by 2030.
Under the plan, CY24 will see launch of the single-motor Volvo XC40 Recharge in India, while CY25 will mark the introduction of the EX30 small SUV, followed by the EX90 full-size SUV in the subsequent year.
According to Persson, product introductions are key to stimulating the market. “While so far, the choices of EV products available to customers have been quite narrow, they will now grow, as, not just Volvo, but even our competitors will bring more attractive products. And this will be a key reason driving electrification in India going forward as there will be a lot of stimulation to the EV market from the supply side going forward,” he said.
However, the Swedish carmaker said that, like in other APeC markets such as Japan and Korea, electrification in India has not fully picked up. “With a 1-2% EV penetration ratio, India is very similar to Japan and Korea, barring the fact that the other two are mature economies, while India is still developing,” he said, adding that he expects EVs to become more popular in the premium segment in India before they capture the mass-market segment.
“Perhaps we are not in total sync with the market, but in the long-term, we are totally convinced that it (going fully electric) is the right strategy. We are here for the longer game – we are running a marathon, not a sprint,” he added.
He also added that Volvo remains committed to its 2030 EV roadmap despite the recent slowdown seen in EV sales in major markets, including the US, Europe, and China. The current slowdown, he pointed out, is not totally unexpected.
“While there is a bit of plateauing in EV sales, it is not like it is going backwards. In fact, in many markets, it continues to grow significantly, but not quite like the pitch as before. And this is something that we always expected.
“We expected the EV sales to not be exponential but follow an S curve – a very strong adoption rate in the beginning by virtue of the early adopters, followed by a slower growth rate, and then taking off again. We expect that this pattern will look similar in almost every market. Therefore, we are totally committed to going fully electric by 2030, which is still six years away,” he said.
At the same time, Persson is not opposed to the idea of plug-in hybrids or PHEVs as a stepping stone towards full electrification.
“We do believe that for some consumers, PHEVs could be stepping stones towards full electrification. While we do have the products in our global portfolio, it is something that we are currently evaluating for the Indian market. We are looking at all aspects, and government taxation on hybrids is part of the equation,” he added.