Of the top 5 luxury car makers, Volvo is the only one who does not have a manufacturing unit in the country. Audi India has a unit in Aurangabad, BMW has one in Chennai, Mercedes Benz has one in Pune, while Jaguar Land Rover too has a unit in Pune.
This means all Volvo cars currently sold, are sold as Completely Built Units or CBUs, unlike their competition, who sell their best-selling products as Completely Knocked Down Units or CKDs. The import duty attracted by a CBU, as compared to a CKD, is almost double. This makes Volvo India cars expensive, as compared to the competition.
Considering India is a price conscious market, plus with little brand following, Volvo India is finding it difficult to sell cars in India. Their sales for 2013 stood at 936 units. No, there is no shortage in demand for luxury cars, as the same figures for Audi was over 10k units, Mercedes at 9k+ units, and that of BMW India at 7k+ units.
Volvo India have already revealed that they aim to sell 10,000 cars annually in India by 2018. So, how will they make this enormous jump? Well, they have their plans in place. They will soon set-up a plant in Karnataka, the same state which also houses Volvo Bus plant. Once this plant is operational, Volvo will start manufacturing cars in India, which will bring the price of their cars down. They will also setup more dealerships, and invest a little more in brand promotion.
Source Autocar India