Volvo Auto India MD Tom Von Bonsdorff with the XC90 T8 plug-in hybrid SUV in New Delhi
Swedish carmaker Volvo launched its first plug-in hybrid, the XC 90 T8, on Wednesday. At Rs 1.25 crore, this will be Volvo’s most expensive offering in India. Tom Von Bonsdorff, managing director of Volvo Auto India, tells Ajay Modi in an interview about the company’s plans. Edited excerpts:
The luxury car segment saw challenges from the ban on diesel in the NCR...
The market sentiment in Delhi was lower due to the ban. Customers, in general, were hesitant. We were able to register our cars since the ban did not apply to us. Overall, the Delhi market declined by 25 per cent, but we grew by about 15 per cent.
But diesel is not the bad guy. Technologies have advanced and in Europe diesel is a preferred power train because you can have a particulate filter to clean the vehicle and CO2 emission is much lower.
How fast are your sales growing?
Our sales have grown 25 per cent this year. We will maintain this for the whole year. This is better than the 18-per cent growth we registered in 2015. We sold 1,400 cars last year. This year we should sell 1,800 cars. I don’t think any other premium brand will post similar growth this year.
What market share are you eyeing?
The luxury market in India is very small. You have many Asian countries where this segment is significantly bigger and so the volume potential is higher. We are happy with the recent growth in percentages. We can’t expect to grow much faster. But we would like to sell much more than 2,000 cars. We want to have 10 per cent of the premium car market by 2020, from about 4 per cent now.
At what point will it make sense for Volvo to have some local value addition?
If we continue growing at this pace, I think our headquarters will be interested in making sure we do more here. Our job is to make sure we sell cars so that headquarters is keen on local assembly or something else. The good thing is our pricing is quite competitive in India. It is now up to us and our dealers to sell more and convince the company to want to invest.
Is your India operation making money?
We are here in an investment mode. We are not a huge money maker for the company. We are here to make sure that in the coming years we become successful. We are beginning to meet our sales targets. We need to make sure that we grasp the potential here.
What is your target segment? Which are your main markets?
We are targeting people with a certain mindset. These are successful people who care about others. A person who buys a Volvo may be a bit more environmentally conscious. We have been successful in South India, though the biggest markets are the NCR and Mumbai. We are setting up showrooms in Jaipur, Lucknow and Pune. We have 16 showrooms and want to end the year at 20.