We want to be on a par with German brands: Tom von Bonsdorff

Interview with managing director, Volvo Auto India Ltd

Swedish luxury car maker Volvo, which competes with German brands BMW, Mercedes-Benz and Audi in India, eyes a market share of 10 per cent in the luxury car segment in the country by 2020. Towards this goal, the company plans to add four new models and increase its dealership strength to 20.  Tom von Bonsdorff, managing director of Volvo Auto India, was in Chennai to launch the S60 T6 Petrol. He spoke to T E Narasimhan about the company’s plans for India. Excerpts:

How you are planning to achieve 10 per cent market share in the luxury segment?

All car manufacturers are quite aggressive in their growth plan. Last year, we did record sales. This year, for the first time, we’ll reach half a million cars globally. Based on the new cars on a new platform, we have a line-up that is best suited for India. In 2014 (calendar year), Volvo reported a 30 per cent growth and sold 1,200 units. With the upcoming launches and expanding dealership, the target can be achieved. India is one of the fastest growing markets for Volvo.

Volvo currently has only 15 dealers in India. Will it be enough to achieve the target?

We are present in all the major cities, but we need to expand. By end of this year, we will increase our dealership to 20.

How many new products are in the pipeline to back your 10 per cent market share target?

We have variants and new products. In the next two years, we will launch three to five all-new cars, besides some variants.

Of your five luxury models, which ones are driving growth?

Among the five luxury models - S60 (a sporty sedan), S80, V40 (luxury hatch back), V40 Cross country, XC 60 (luxury SUV), and XC90 (a 7-seater luxury SUV) - XC90 is the backbone of our growth, followed by the sub Rs 25 lakh car V40. Unlike other brands, we are not dependent on one product; we have a wide range of products.

India is a price-sensitive market and Volvo is considered an expensive brand. Is it a challenge? One of the reasons cited is that you import your products for sale in India. Any plans to assemble or manufacture the products here?

With the safety features and design combined with quality, we have a good reason to command premium prices for our products and this is not a challenge. Premium sales are growing. We are well priced. And we have no plans to assemble or manufacture in India for the time being.

Will Volvo look at launching products priced below Rs 25 lakh?

If we compare our products with that of Audi, BMW and Mercedes-Benz, we have aggressive positioning in terms of price points. Currently, our products are priced between Rs 30 lakh and Rs 65-70 lakh; but this would change. We might have some niche cars, which might be even more expensive.

Currently, the volumes are in sub-Rs 25 lakh. The sub Rs 30 lakh segment is about 30 per cent of the premium segment. That is one area we will focus. The large sports utility vehicle segment is 2,500-3,000 cars annually. We have very interesting products. We will have decent numbers in that segment and this is one area we plan to grow.

Where do you want to position Volvo brand in India in the luxury car segment?

We want to be on a par with our German competitors, both in pricing and brand value, while improving our products to be more human-centric and safe.

How do you propose to build the Volvo brand in India?

Building a brand is a long-term projects. Our brand is growing and new products will give brand reputation. We are also putting more money on brand building.

Any plans for combined dealership, where by both commercial vehicles and passengers cars can be sold by one dealer?

No, we have no such plans.