Even as volumes of Volvo Cars are increasing yr-on-year, the employer has been not 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 approximately high taxes in India hurting the extent growth, growth in smaller towns and they want to create attention of the emblem. Excerpts:
Volvo vehicles are regarded for their overall performance and durability international, but sales numbers in India are a ways below your competitors. What is not operating for you?
Besides FY19, which 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 a lot 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.
Top three gamers (Mercedes, BMW & Audi) are continuously in a fight for the rank, even as Volvo seems to be out of the chase. Is it because you’re content with volumes you sell or do you in future intend to get into the ranking sport?
We will by no means be happy with what we’ve and of 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 again, 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 the one’s desires via our cars.
How many years do you observe it’ll take to attain at a level while you could outrightly challenge your competitors?
Our combat is long term and for brand new clients. We are very aggressive on Tier 2 and Tier three markets and we’ve got enough products and outlets to cater to prospective customers, although there is always a room to increase. I think it’s extra about getting human beings to understand us and I am very assured that after they know us, they’ll like us and purchase us. We have a bonus of being a Swedish logo because while people want to strive something apart from the equal vintage luxury manufacturers, we will have a higher hand. The rest can fight for old customers.
Have the Indian operations been profitable for Volvo?
It’s not been hugely profitable for us like many other foreign automotive businesses, and high taxes had been a significant deterrent. However, we have our very own plant in Bangalore, and with the point of interest on excessive localization content material, we can maintain to chase profitability.
In a scenario in which taxes for luxury cars are the highest, will it be smooth an excellent way to keep the enterprise profitable within a long time? Do you’ve got a lower back-up plan? It’s no longer clean at all. Taxes on luxurious vehicles in Sweden is around 20%, in the US it’s 15%, and China imposes 10%. In assessment, India levies almost 50%, that is honestly unreasonable. The government has to remember that if taxes are low, sales will slow growth, and consequently, the government sales from the section can be better. Many customers who have the pockets to shop for luxurious cars, chorus from doing so due to the charge.