Volvo to Build a New Factory in Sanand, India image

Volvo, backed by Chinese auto maker Geely, plans to build a new plant in Sanand in Gujarat or Chennai in Tamil Nadu, India.

Volvo is currently searching for a place in India to build a semiknocked down plant. It will more likely choose Gujarat, as the company plans to meet the Gujarat Chief Minister in August. Volvo is confident of its success in the Indian auto market expecting a 15% share in the luxury car segment in India by 2020. In 2011 Volvo sold 320 vehicles in this country and it aims to sell 800 more by the end of this year.

“We are looking aggressively at the Indian luxury car market and aim at having a 15% share in the segment by 2020. The decision to identify a location is taken by our team in the US who are looking at the various options. Nothing has been finalized yet,” said Tomas Ernberg, managing director, Volvo Auto India.

Volvo entered the Indian market in 2007 and is currently importing cars as completely-built units. If Volvo will complete its plan, Sanand will have its first exclusive luxury car facility. But the company still has a tough road ahead, having to take on Mercedes, Audi and BMW who entered the country four years ago.