Volvo Auto India is considering trimmed-down and cheaper variants of its luxury models (such as the new S60 sedan) for the Indian market in a bid to push for volume growth and compete more aggressively in the fast-growing domestic luxury car segment.

The move, which is expected to help the Swedish carmaker attract more customers, will see it doing away with some top-end features, such as the pedestrian detection technology and lane departure warning system, from its vehicles.

“Volvo is looking at expansion of car lines and models in India in its next phase of growth. Cheaper variants of existing models are being considered by removing certain features that are quite often not requested for by the Indian customer. This will help generate higher volumes,” said Mr Tomas Ernberg, Volvo Auto India's newly appointed Managing Director, during his first interaction with the domestic media on Friday.

Volvo's strategy follows that of competitors like BMW, which has launched lower-priced variants of models such as the X1, 3-series and the 5-series, under the ‘Corporate Edition' badge. According to industry sources, this has helped BMW top the domestic sales chart in the luxury segment over the past two years.

Incidentally, Volvo also sells ‘Standard' trim variants of models such as the S60 and XC60 Sports Utility Vehicle in other markets, but not in India. In the home market, the S60 is priced between Rs 27 and Rs 34 lakh, while the top-end sedan S80, retails for Rs 38.1 lakh. The other two models, XC60 and XC90, are sold for Rs 39.5 lakh and Rs 43.5 lakh, respectively.

According to industry estimates, the domestic luxury car market grew by 75-80 per cent in 2010 to around 18,000 units. Among the larger carmakers, sales were led by BMW at 6,246 units, while competitor Mercedes-Benz was close behind with 5,819 units, followed by Audi at 3,003 units.

Network expansion

Mr Ernberg said that his mandate over the next few years would be to rapidly expand Volvo's dealership network, increase fixed marketing costs and expand the local office by hiring more industry professionals.

“We will look to double our sales network (from seven outlets) by the end of next year. The plan is to double or maybe triple sales over the next 2-3 years,” he said, adding that its new owner has given the company the required cash and impetus to grow rapidly. Volvo Cars was sold by the US-based Ford Motor Co to Chinese carmaker, the Zhejiang Geely Holding Group, last year.

Volvo is targeting sales of 500 units this year in India, a big jump from the 130 cars it sold last year. . Globally, the target is to sell 4.5 lakh units in 2011 and 8 lakh units by 2020.

>roudra.b@thehindu.co.in

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