Volvo delinks from Ford India

Volvo in India will no longer be a subsidiary of Ford India, but a separate company.

With Ford Motor Company planning to sell Volvo Cars and announcing Chinese carmaker Geely as the preferred bidder, the Indian operations of the Swedish company have severed its ties with Ford India, said Mr Paul de Voijs, Managing Director, Volvo Auto India, while speaking to Business Line.

Volvo Cars India has changed its name to Volvo Auto India Pvt Ltd, with effect from October 1.

“The process which started in May should help in case of a possible sale. It will help avoid complications,” he said.

In 1999, Ford had acquired Volvo Cars from Volvo AB as part of its Premier Automotive Group, which then included Aston Martin, Jaguar and Land Rover. Volvo had begun operations in India in March last year as a subsidiary of Ford India, with all backend operations being handled by Ford.

When asked how the sale of Volvo may affect the company’s plans, especially in terms of component supplies for Volvo products, Mr de Voijs said that there should not be any impact.

“Short-term changes won’t affect our long-term plans for India. We do not believe in setting up a huge network at first, but instead, we believe in the gradual process to build our strength in terms of volumes as India is a huge market,” he said.

He added that the company already has seven dealerships in the country, which it will increase to 12 by end 2010. The new dealerships would be in Kolkata, Bangalore, Ahmedabad, Goa and Coimbatore.

Mr de Voijs said that Volvo had sold about 100 units between March and December last year and sales for the current year is close to doubling. “The luxury segment has grown by 20%, whereas we have grown by 23%,” he said.

Volvo has plans to launch two new cars in India next year. First up will be the smaller brother of the XC90 luxury sports utility vehicle (SUV), the compact crossover SUV XC60, which is slated for launch in the first half of 2010. This will be followed by the launch of the new S60 sedan in the second half of the next year. Volvo sells its top end S80 sedan and XC90 in India.

“The XC60 will be launched after the Auto Expo. We are currently road testing it at the International Centre for Automotive Technology (iCAT),” said Mr de Voijs.

He said that Volvo will also launch a diesel variant of the S80 next month, while the C70-coupe may also be made available, but on an individual basis according to demand.