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INDIA

Volvo cuts safety features on India market

In a bid to increase its automobile market share in India, Volvo has announced that it will make more low specification versions of its range available, with fewer safety features and smaller engines.

Volvo cuts safety features on India market

“The strategy is a response to the growing demand in India for high end cars but at lower prices,” Spokesman Stefan Elfström told The Local.

“Like many other luxury car makers we are reacting to consumer preferences in India, where they are very price sensitive. We have decided to offer smaller engines, the T5 for example, instead of a six cylinder engine, and made other modifications so we can be more competitive,” he added.

The car maker is planning to launch cheaper versions of its high end cars, including the popular XC60 och S60, but without certain safety equipment that is, according to Volvo requested less often by buyers in the Indian market.

Features such as lane departure warning and pedestrian detection technology, which automatically slows the car down when it detects pedestrians nearby, are to be jettisoned to make the cars more price-competitive, which will help increase sales.

“With the introduction of lower specification cars, we are looking to increase our market share threefold,” said Elfström.

In India, Volvo sold 150 cars last year.

“We hope to be reaching four figures this year,” said Elfström.

The company will not forgo the fully equipped versions of the cars altogether though.

“We will still offer a version with everything included, but this is the same strategy as our competitors in India like Audi and BMW,” he concludes.

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VOLVO

Sweden’s Volvo regains strength after pandemic puts brakes on earnings

Swedish truck maker Volvo Group was hit by a sharp drop in earnings due to the coronavirus pandemic, but business rebounded at the end of the year.

Sweden's Volvo regains strength after pandemic puts brakes on earnings
Volvo Group CEO Martin Lundstedt. Photo: Adam Ihse/TT

In 2020, the group saw “dramatic fluctuations in demand” due to the Covid-19 pandemic, chief executive Martin Lundstedt said in a statement.

For 2021, Volvo raised its sales forecasts in its trucks division – its core business – in Europe, North America and Brazil.

However, it said it also expected “production disturbances and increased costs” due to a “strained” supply chain, noting a global shortage of semiconductors across industries.

The truck making sector is particularly sensitive to the global economic situation and is usually hard hit during crises.

In March, as the pandemic took hold around the world, Volvo suspended operations at most of its sites in 18 countries and halted production at Renault Trucks, which it owns, in Belgium and France.

Operations gradually resumed mid-year, but not enough to compensate for the drop in earnings.

With annual sales down 22 percent to 338 billion kronor (33.4 billion euros, $40 billion), the group posted a 46 percent plunge in net profit to 19.3 billion kronor (1.9 billion euros).

Operating margin fell from 11.5 to 8.1 percent.

However, the group did manage to cut costs by 20 percent.

“We have significantly improved our volume and cost flexibility, which were crucial factors behind our earnings resilience in 2020,” the group said.

Volvo's business regained strength in the second half of the year.

“Customer usage of trucks and machines increased when the Covid-19 restrictions were eased during the summer and this development continued during both the third and fourth quarters,” it said.

“Both the transport activity and the construction business are back at levels on par with the prior year in most markets.”

For the fourth quarter alone, the company reported a 38-percent rise in net profit from a year earlier.

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