Swedish luxury automaker, Volvo, has officially announced that it will start assembling its cars locally in India from 2017. The local assembly will be focused on the cars based on Volvo's SPA modular vehicle architecture and will be done with the help of Volvo Group India's existing infrastructure where Volvo trucks, buses and construction equipment are already being manufactured.

The assembly plant is located near Bengaluru, and the first model to be assembled there will be Volvo's flagship SUV, the XC90. Other models slated for local assembly will be announced later. But we expect the XC90 to be followed by the S90 as it is based on the same platform. Although the exact dates for the commencement of assembly haven't been revealed yet, the automaker did state that the first assembled cars will roll out within this year.

Volvo S90: First Drive Review

The local assembly will certainly help the company to price its cars more competitively. Currently, all Volvo cars are being imported as completely built units (CBU), and hence, they attract more taxes. However, once the local assembly begins, the cars will be imported as Completely Knocked Down units (CKD), attracting relatively lower taxes. The Volvo XC90 has a starting price of Rs 71.97 lakh for the base diesel variant and goes up to Rs 1.28 crore (all prices, ex-showroom, Delhi) for the plug-in hybrid variant. Once the local assembly starts, expect the prices to come down by around Rs 5-10 lakh. Luxury automakers like Mercedes-Benz, Jaguar, Audi and BMW are already assembling their popular cars in India locally for quite some time now.

Volvo currently has a market share of close to 5 per cent in the luxury segment in India, thanks to the 32 per cent sales growth in the past two years. It has 16 dealerships across India and will soon open two new dealerships in Lucknow and Pune.

Also read: No New Diesel Engines In The Pipeline, Says Volvo CEO

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