Swaraj Baggonkar Moneycontrol News
About 87 percent of cars in India run less than 30 kms a day and Volvo believes that plug-in hybrids (PHEV) are the best stop-gap solution before moving to fully electric. Volvo Cars India Managing Director Charles Frump said today that it will become the first car maker to locally assemble the plug-in hybrid car in the country, which will go into production in late 2019.
Here are the excerpts from the interview with Frump.
Q. What is the big announcement for Volvo?
A. Volvo will be the first company to locally assemble a plug-in hybrid vehicle in India. That is something we are very proud of. We had the CBU XC90 PHEV since 2016 and this was the natural next step.
Q. But what gave you the confidence of going ahead with the assembly?
A. The vision we have is that we need to be the leaders in electrification. To start bringing the products and and help customers understand the plug-in hybrid technology and how this will help us bridge a full battery electric vehicle we need to start, with hard core products that consumers can touch and feel. There is a bit of government support, not very much, that certainly helps. As a company who is moving towards battery electric technology we need to start early.
Q. What has been the response to the PHEV XC90?
A. It has been quite good. We have had limited volumes (considering) it is a completely built unit. The technology is not inexpensive so brining it here we put it on the highest end of the product portfolio. It was a good way to test the waters.
Q. Do you expect sales to go up from here?
A. Absolutely. In addition to coming in CKD we also will be expanding the line-up so instead of being only on Excellence (variant) we will also have inscription seven-seater.
Q. No manufacturer assembles any PHEVs in India. What were the challenges to do that?
A. Part of it is the business equation. We needed to be sure that we sell enough cars to make the business case. We are there. As more and more people buy PHEVs hopefully there the government will take a note of it and have a policy that is more friendly.
Q. But the government wants everyone to move to electric.
A. The idea behind this is to reduce emission. PHEVs take a dramatic step to do just that. But there is no assistance for PHEVs in the current policy. We are quite happy with the government’s direction of pure electric future. How we get there is not surprisingly challenging for planning purposes. At Volvo we think PHEVs can become that interim solution.
Q. Where else is the PHEV XC90 assembled outside India?
A. We assemble it in Sweden and Malaysia and India is the only third country to do it.
Q. Was there any additional investment you had to make for it?
A. Yes there was an investment but how much was it is not something we would publicly share.
Q. What is the roadmap for PHEV for the next three years?
A. We are looking at a line-up of four launches of PHEVs over the next three years. We have already announced the line up of two battery electric vehicles. We will be looking at India to localise of these cars.
Q. The price of the XC90 PHEV includes the battery charging socket?
A. Yes, it will have two installations - one at home and one at the place of work.
Q. Do you intend to stand out from the crowd by doing this?
A. Starting from 2019 all the cars we launch will be electrified. We are very much standing out from the crowd. We see it as big opportunity. The numbers (of PHEV) are going to be very small probably single digit.
Q. The 10 months to October has been good for Volvo. Where do you hope to end by end of the year?
A. We are on a good roll, sales are up 40 percent. We did a 27 percent growth last year. It is safe to say that it is a very challenging market and we see the credit tightening being a big challenge. We are blessed to have strong demand for our products.
Q. Do you think discounting will be a very intimidating factor next year?
A. We have largely not played the discounting game (so far). Perhaps it is a volume detriment to us but it is a long term investment and nobody wins in this.
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