Volvo India, plans to more than double sales of its multi-axle heavy vehicles to 500 units in the calendar year 2000.
Volvo India P. Ltd. is the Indian subsidiary of Volvo, Sweden.
Volvo sold 200 units of its multi-axle heavy vehicles in 1999, and believes it can clock sales of 500 units in the current calendar year. The company's Tippers models were launched in the eastern part of the country. This was reported by a leading financial daily.
The company hopes to corner over 30% market share in the multi-axle heavy vehicles segment within a 10-15 years time frame. It is particularly optimistic about its Tippers model. The roll-out in east India is linked to the demand for heavy commercial vehicles in that region with the presence of freight-linked industries like cement and steel. The company also plans to launch buses within a period of two years.
Volvo's plans for the Indian HCV market are rather ambitious. However, to the company's credit, it has undertaken steps to ensure that its passage in the country is smooth. To this end, it has focussed on critical aspects like fuel consumption, which is 50% lower than the average HCV. It has also ensured that its vehicles are relatively pollution-free (lower by 85%).
Given Volvo's dominance in this segment at the global level, it has the experience and the technology to dominate the Indian market as well. It has already begun on a positive note.
However, volume growth will stabilise at a certain level, after which the company will struggle to register sustained growth. Volvo's vehicles are priced on the higher side, which may not be a problem at present, but could prove disadvantageous in future as Tata Engineering becomes a serious competitor. Moreover, Volvo does not have an extensive distribution and spare parts network at present, unlike its competitors.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407