Volvo, the leading Swedish auto giant does not want to lag behind in its success in India. The company is expected to convert the new Indian manufacturing plant into a low-cost center for car export. This decision was taken due to the raising demand for public transport. Within a year, the plant is expected to produce 450 buses and rise further by 100 units by 2010.
According to Chief Executive Hakaan Karlsson, population in the Asian cities is rising and as a result, the traffic is taking its toll. The need for good public transport, which is cost-effective and modern, has become a necessity. Another important reason for making India a base for export is the use of cheap labour and locally made components.
Volvo plans to bring out new car models every year to expand in the Indian car sector. Their two existing models, S80 and XC90, are already at showrooms. The S80 is competing with BMW's 5-series with the price tag ranging from Rs. 37-42 lakh and the XC90 SUV takes on Audi Q7, BMW X5 and Mercedes M Class (the Rs. 60 lakh plus category).