Even as volumes of Volvo Cars are increasing year-on-year, the company has not been able to reach near its competition like Mercedes-Benz, BMW, and Audi. Charles Frump, MD, Volvo Car India, in an interaction with FE’s British Raj, talks about approximately high taxes in India hurting the extent of growth, growth in smaller towns, and they want to create attention to the emblem. Excerpts:
Volvo vehicles are regarded for their overall performance and durability internationally, but sales numbers in India are a ways below your competitors. What is not operating for you?
Besides FY19, which has become a flat year for the entire industry, we have been growing volumes 12 months-on-yr, although on a low base. Four years ago, very few people considered Volvo cars; however, nowadays, many of our clients are first-time consumers, so the penetration is increasing. The luxury marketplace is hungry for recipes, and we’ve got the excellent method, something I am happy with.
The top three gamers (Mercedes, BMW & Audi) are continuously fighting for the rank, even as Volvo seems to be out of the chase. Is it because you’re content with the volumes you sell, or do you intend to get into the ranking sport in the future?
We will by no means be happy with what we’ve and the route we need to increase our rank. I think we have some work to do on the cognizance of the brand, which is a continuous procedure. For instance, two years ago, we didn’t even have four outlets; now we have 26 of them. Customers in India have a more significant need, and we’ve vastly improved and fulfilled their desires via our cars.
How many years do you observe it’ll take to attain a level where you could outrightly challenge your competitors?
Our combat is long-term and for brand-new clients. We are very aggressive in Tier 2 and Tier three markets, and we’ve got enough products and outlets to cater to prospective customers, although there is always room to increase. I think it’s extra about getting human beings to understand us, and I am very assured that they’ll like us and purchase us after they know us. We have a bonus of being a Swedish logo because while people want to strive for something apart from the equal vintage luxury manufacturers, we will have the upper hand. The rest can fight for old customers.
Have the Indian operations been profitable for Volvo?
It has not been hugely profitable for us like many other foreign automotive businesses, and high taxes have been a significant deterrent. However, we have our very own plant in Bangalore, and with the point of interest on excessive localization content, we can maintain to chase profitability.
In a scenario in which taxes for luxury cars are the highest, will it be a smooth and excellent way to keep the enterprise profitable in the long term? Do you have a backup plan? It’s no longer clean at all. Taxes on luxurious vehicles in Sweden are around 20%, in the US, it’s 15%, and in China, it’s 10%. In assessment, India levies almost 50%, which is honestly unreasonable. The government has to remember that if taxes are low, sales will slow growth, and consequently, the government’s revenue from the sector can be better. Many customers who have the means to shop for luxurious cars choose not to do so due to the tax.
