Volvo is considering the launch of cheaper stripped down variants of its cars in India. The company plans to boost its sales volume significantly and is relying on the increasing demand of luxury cars in the country to help them achieve their sales target. BMW and Audi have basic variants of its cars, while Mercedes-Benz is also planning to launch stripped down versions of the C-Class and E-Class. The base variants of the BMW X1, 3-Series and 5-Series account for more than 50% of the sales of the Bavarian automaker in the country and now Volvo too plans to remove equipment from some of its cars, including the recently launched S60 sedan.

The basic Volvo vehicle (the S60) has a starting price of Rs. 38 lakhs. The Swedish Chinese automaker imports all its vehicles to the country as it lacks any assembly or manufacturing facility in India. This not only attracts a hefty 110% duty but also leads to expensive spare parts for the cars. A stripped down variant, which could loose equipment such as sunroof, blind spot assist and leather seats will help Volvo play the value game in the highly competitive Indian car market. But will a stripped down Volvo work vis-a-vis a stripped down BMW?

Volvo Bus India has increased its stake to 100% from the previous 70% by purchasing Azad Group’s stake in the company. The company expects to increase its revenue to $1 billion in the next five years driven by its luxury bus segment and exports. The Swedish bus maker expects 2010 revenue to be around Rs 500 crore.

Ford Motor Company has announced it has entered into a definitive agreement to sell Volvo Car Corporation and related assets to Zhejiang Geely Holding Group Company Limited. The sale is expected to close in the third quarter of 2010, and is subject to customary closing conditions, including receipt of applicable regulatory approvals. The purchase price for Volvo Cars and related assets (primarily intellectual property) is $1.8 billion (U.S.), which will be paid in the form of a note in the amount of $200 million (U.S.), and the remainder in cash.

Ford will continue to cooperate with Volvo Cars in several areas after the sale has been completed in order to ensure a smooth transition, but will not retain any ownership in the Volvo Cars business. Following completion of the sale, Ford will continue to supply Volvo Cars with, for differing periods, powertrains, stampings and other vehicle components. As part of the sale, Ford also has committed to provide engineering support, information technology, access to tooling for common components, and other selected services for a transition period to ensure a smooth separation process.

Most automakers have decided to pass on the 2% increase in excise duty completely to the customers. Maruti Suzuki said its’ car will become costlier by 2% whereas Hyundai said the increase in excise duty will result in price rise of its cars by Rs 6,500-25,000 on average. Volvo has also said they will be increasing prices. Fiat India has already announced a revised pricing for the Palio, Grande Punto and the Linea ranging between Rs. 7000-15,500/- The change in pricing will be applicable with immediate effect.

“Following the excise duty hike by the Finance Minister in the budget, we may hike prices by up to Rs. 60,000 to Rs. 70,000 for heavy vehicles and Rs. 5000-6000 for smaller vehicles,” Tata Motors MD, India Operations, P M Telang said.

Volvo Trucks India has increased prices of its vehicles by 3-4% starting this year on account of rising input costs. Prices have gone up on account of high input costs especially, steel and rubber. Prices of Eicher products too have been increased by 2% for the same reasons. The company sold about 1,000 trucks last year in special segments like mining, registering a growth of about 20-25%. The company plans to launch about 3-4 models this year. Volvo Trucks today also launched an advanced truck FH520 powertronic for the heavy haulage segment.

Eicher trucks has launched a new series of heavy duty trucks at the 2010 Auto Expo. This launch forays the global launch of VE Commercial Vehicles, a Volvo and Eicher Motors 50:50 joint venture. The new Rear Engine Semi low Floor Bus are also on display at Eicher Motors stall at Pragati Maidan in New Delhi.

Volvo India has received order for 260 buses in India. Among these the city of Bangalore purchased an additional 140 Volvo 8400 city buses. The customer in Bangalore, BMTC, already operates more than 300 Volvo buses in Bangalore and these buses have radically changed the view of what it is like to travel with city buses in India. For example, the buses are air-conditioned and feature low floors for fast and easy boarding and exiting.

Surveys show that 60% of the passengers in these buses previously traveled in their own car or by motorcycle. For many Indian cities, the goal is to have more people use mass transit and, consequently, this requires new, modern buses. Volvo buses are also used in Bangalore for transportation to and from the airport. Each new Volvo bus placed in traffic increases the exposure of buses. As a result, increasingly more of the population views buses as a better alternative than traveling in their own vehicle.

Volvo Buses has also received orders for 120 Volvo 9400 inter-city coaches to the State of Karnataka, in which Bangalore in the capital and to the State of Maharashtra, in which Mumbai is the capital. The orders are from customers already operating Volvo coaches and who have favorable experiences of them. Volvo’s customers have seen that passengers prefer these coaches, are prepared to pay extra to travel in them and that, as a result, the coaches generate highly favorable productivity, says Akash Passey.The buses will be assembled at Volvo Buses’ plant in India and deliveries will be made in 2009.

Volvo Car Corporation is the first car manufacturer to own a wind tunnel that fully simulates the airflow around and underneath the car’s body, combined with wheel rotation on a flat road surface.The main idea behind this wind tunnel is the quest for lower fuel consumption and lower carbon dioxide emissions.

Volvo Cars’ wind tunnel was a cutting-edge facility when it was built in 1986 – and 20 years later, after being completely refurbished, it is once again setting the benchmark in the car industry for its precise measurements of aerodynamics.

“Our 20 Million Euro investment is already paying quick dividends. We have succeeded in reducing air resistance in the new Volvo C30 DRIVe by more than 10 percent. This in turn leads to around 3 grams lower CO2 emissions per kilometer,” explains Tim Walker, aerodynamics expert at Volvo Cars.

Translated into fuel consumption, this is a reduction by just over 0.1 l/100 kilometers according to the official EU Combined Cycle. In a real driving situation, however, where speed and therefore air resistance are often higher, the actual saving in fuel can be more than twice as high, that is to say in the region of 0.3 l/100 km.

This means that a driver who covers 15,000 km per year will save about 45 liters of fuel – almost a full tank in a Volvo C30. It’s an economy benefit that is also appreciated by the environment.

“With a firm focus on environmental properties for the foreseeable future, our recently upgraded wind tunnel is going to be a particularly valuable tool. Aerodynamic improvements to the body and underside of the car will help us cut CO2-emissions across the whole model range,” says Magnus Jonsson, Senior Vice President, Research & Development at Volvo Cars.

Source – Volvo

Volvo Car India (VCI) on Sunday said it plans to strengthen its dealer network and sell 400-500 in the country by the end of this fiscal and launch 2-3 new models in future.

Volvo, which has 10 cars in its portfolio at the moment, is also looking at launching 2-3 new models in future after testing and seeing the market response in India, where it has so far sold 100 cars after its launch less than a year back.

Part of Volvo’s portfolio at the moment include three sedans, 1 station wagon, two convertibles and three cross-over model range.

VCI, a division of Ford Motor Company, had launched two of its flagship models, Volvo S80, one of whose top end variant costing Rs. 44 lacs was gifted to Olympic gold medalist Abhinav Bindra, and Volvo XC90, in September 2007.