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Volvo ponders luxury factory in India

Swedish luxury car maker Volvo said on Thursday it was studying the possibility of setting up a car manufacturing plant in India as part of a drive to nearly double global sales.

Volvo ponders luxury factory in India

The company aims to increase worldwide sales to 800,000 vehicles by 2020, from a current 440,000 a year.

“It makes sense to set up a car manufacturing facility in India as we target sales of 20,000 units by 2020 here,” Volvo Auto India managing director Tomas Ernberg said in western Ahmedabad city, the Press Trust of India reported.

“A group within Volvo is conducting a feasibility report,” he told reporters.

Volvo sold 820 units in India this year, up from 320 vehicles last year. The company expects sales of 1,200 vehicles in 2013.

Luxury car makers have dealerships in many large Indian cities, attracted by the growing numbers of wealthy Indians. Around 28,000 luxury car units were sold in India by players like Mercedes, Audi, BMW, Volvo, among others, this year.

Along with China, India has become a key market for global car manufacturers after growth in Europe and the United States stagnated in recent years.

Sweden’s Volvo Bus Corp, a separate company, entered India a decade ago to

make heavy-duty trucks before moving into the luxury bus segment. The company

has a large bus manufacturing factory at Hoskote, near the southern city of

Bangalore.

AFP/The Local/og/at

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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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