Volvo India Bets on Luxury Growth, Sees Tesla’s Entry Boosting EV Adoption
Volvo Cars India anticipates sustained demand in the luxury car segment, fueled by India’s expanding economy and a growing number of aspirational buyers. Jyoti Malhotra, Managing Director of Volvo Cars India, expressed optimism about the market’s trajectory in a recent interview.
Malhotra highlighted that with the rising income levels, particularly among younger consumers, the demand for premium products is on the rise. She believes that as household incomes become more balanced across different segments, the sales of premium cars are likely to experience consistent growth. Furthermore, Malhotra views Tesla’s entrance into the Indian market as a positive development for the electric vehicle (EV) sector. She suggested that the arrival of more global players will intensify competition and provide customers with a broader selection of choices.
Malhotra also noted the significant announcements made by major automakers at the recent Auto Expo, with most unveiling new EVs. This indicates a clear industry shift towards EV adoption, offering customers increased options and reinforcing the perception that EVs represent the future of the automotive industry.
These are the edited excerpts from the interview:
Q: How is India positioned for growth despite global uncertainties?
A: “There’s a lot of geopolitical uncertainties, and India is not really isolated. And beyond that, let’s look at from two aspects, I would want to put into one year perspective. But one thing is sure, India is in a growth trajectory. Indian economy is going to get better and better in medium to long term. Number one, the demographic dividend is very much here, because from 2018 onwards, we have a median age, which will continue, and we have seen many other countries and economies when we are in that midst, together with economic growth, this will mean very good for our industry. All the lead indicators are positive. What changes now is these two things coming together. The scale of economy is now at a very good place, and then growth coming from that is going to ensure that the per capita incomes are going to go up. The division of household income was quite skewed. But that has started to expand. And in next 10 years, this is going to be much more balanced. Obviously, it will still continue to be heavier at the base, but will become much more substantial among the top also. You can already see the consumption pattern because of demographic dividend leaning to more young, aspirational buyers, they are wanting to lap up whatever is available, watches, electronics etc. So you can see people are now looking for the best they can afford the impact of tariffs.”
Q: The United States has imposed tariffs on Canada and Mexico, on China also, China has also announced retaliatory tariffs. What impact will this have on the Indian auto industry?
A: “It is a very difficult question, I will be very honest, and things are still developing. I believe that recent visit of our Prime Minister to US, in some ways, has really helped to calm down the nerves, and which at least, in my view, it has come to a neutral situation right now, at least for the short term. We hope that things will settle down and we have a good equation between the two leaders, which will ensure that we are moving in the right direction, and at least remain, isolated from what is going around. But at some at certain level, we cannot be isolated, let us see how it develops from here.”
Q: What do you feel about the prospect of Tesla entering the country? How will it impact the auto industry?
A: “There are two things, personally, I would say, there have been lot of this speculation about Tesla coming for quite some time. Let us see when they come and how and what shape they come. In my view, more companies come to India better it is. In the recent Auto Expo, almost everyone announced an EV which is good for the industry, because now there are choices. Customer gets a clear signal that every company is now thinking of EVs. Tesla coming to India also gives a very good sign that, okay, India is a good country for EVs. It will give more choice to customer. It will only add to the buzz, more people will start considering EVs. It becomes like daily discussion on which EV to buy and whether to buy you or not. I think that discourse has to change from whether should I buy EV to which EV should I buy, it will help that.”
Q: India and EU are negotiating a free trade agreement. They hope to conclude it by the end of this year that was put out in the joint statement by both India and EU last week. What would be your expectation and hope that when it comes to tariffs on the auto industry, what level should it be brought to that may actually help your companies increase their footprint in India?
A: “We should understand one thing, that tariffs are actually two way what we are seeing already. If we have to give in, and we have to give up also, it applies on both sides. It is a very loaded situation. On one side, if you see what has happened now when it comes to auto industry, our auto industry has become massive in terms of number of cars that we sell here. And if you really see we have been able to do this despite all the tariffs and everything available, by focusing more and more on Make in India. I think that’s the right direction for the country. We should promote that we are able to sell more cars which are produced in India, or which are valued added in India, or which are assembled in India. Obviously, some of the import duties are very high. We should balance them out in such a way that we get benefit of offering our domestic market to others, but also getting access to our car being produced in India to other markets. We have to strike the right balance very difficult to put a number here, but we have to be competitive.”
Image Description: The Volvo EX30 electric car.
