However, it expects 2026 to be a year of strong growth due to the launch of the EX30 by the end of 2025.
05 Mar 2025 | 2663 Views | By Ketan Thakkar and Mayank Dhingra
Swedish luxury car maker Volvo Car India is anticipating low single-digit growth in 2025, as market conditions remain volatile due to global and domestic uncertainties.
However, 2026 is expected to be a year of strong growth, particularly with the launch of the EX30 by the end of 2025, which ...
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Swedish luxury car maker Volvo Car India is anticipating low single-digit growth in 2025, as market conditions remain volatile due to global and domestic uncertainties.
However, 2026 is expected to be a year of strong growth, particularly with the launch of the EX30 by the end of 2025, which is expected to drive EV adoption further.
"2025 will be a year of stability—we don’t expect major shifts. But 2026 should be a big year, with a substantial rise in EV penetration," said Jyoti Malhotra, MD, Volvo Car India to Autocar Professional on the sidelines of the launch of the all new XC90.
"While reaching 50% EV penetration may be difficult, we are confident that it will be significantly higher than a third of our total sales," he said.
One of the most significant factors behind Volvo’s outlook for 2025 is the growing interest in EVs. While 2024 saw some market confusion between hybrids and EVs, the post-Auto Expo landscape has shifted, with more brands like Mahindra, Tata, Hyundai, and Maruti entering the EV space.
"Earlier, the question was, ‘Should I buy an EV?’ Now, it’s ‘Which EV should I buy?’ That’s a big shift," Malhotra noted.
Volvo ended 2024 with 24-25% of its total portfolio being EVs, marking a significant step toward electrification. However, overall sales were slightly lower than the previous year, impacted by economic uncertainty during elections in the first half and hesitation over hybrids vs. EVs in the second half.
"Despite the market slowdown, our EV penetration is a major achievement," Malhotra said. "We have been clear about bringing one EV every year and will continue to do so. By the end of 2025, the EX30 will be introduced in India. We are finalizing our feasibility study to go through the local assembly route."
Volvo remains committed to its goal of 90-100% electrified sales by 2030, a mix of BEVs and plug-in hybrids (PHEVs). However, Malhotra acknowledged that EV adoption is not uniform across markets, and the company is adjusting its strategy accordingly.
"Our path to electrification remains unchanged, but local adoption rates influence our approach," he said. "Each market moves at its own pace, and India is following its own trajectory."
While PHEVs have been a transitional solution in Europe, Malhotra emphasized that India’s policy direction is pushing for full BEVs, not interim solutions.
"We had some success with PHEVs, but customers weren’t buying them for the electric capability—they were buying them for luxury features like massage seats and crystal gear shifters," he explained. Volvo closely monitors the situation but has no immediate plans to introduce PHEVs in India.
"If something changes, we have the technology and can return it quickly. But for now, the government’s stance is clear: they want full EV adoption, not hybrids," Malhotra stated.
On a global level, Volvo has adjusted its 2030 target to include both BEVs and PHEVs, reflecting the non-linear adoption of EVs across different markets.
"We have learned over the years that EV adoption is not linear, nor is it uniform across countries. Some markets move faster, others take time, so we must adjust accordingly," Malhotra said.
For India, this means staying focused on EVs but monitoring policy shifts that could impact future product decisions.
In an industry dominated by BMW, Mercedes-Benz, and Audi, Volvo differentiates itself by focusing on electrification and introducing models at the right time.
"Competition is always welcome, but our approach is different," Malhotra said. "Unlike some competitors who have already built a diverse EV lineup, we are taking a step-by-step approach, ensuring each model is introduced strategically."
Rather than launching multiple EVs simultaneously, Volvo carefully selects the right segments to enter, prioritizing long-term growth over short-term volume expansion.
A crucial part of Volvo’s brand-building in India has been the XC90, which continues to serve as the company’s flagship model and a symbol of its evolution. Malhotra highlighted that the XC90 played a transformative role for Volvo globally and remains essential in shaping the brand’s perception in India.
“This car changed the trajectory of the company. When you look back ten years ago, this model was instrumental in redefining Volvo’s identity, and we want to showcase it properly in India as well,” Malhotra said.
As a luxury SUV that blends safety, design, and advanced technology, the XC90 has been a key driver of Volvo’s premium positioning. It has also helped build awareness among Indian luxury buyers, reinforcing Volvo’s identity as a credible alternative to German competitors.
While electrification remains the company’s priority, models like the XC90 continue to shape Volvo’s premium aspirations in India, providing a strong foundation for the company’s long-term growth in the luxury market.
With Tesla lobbying for lower import duties, Malhotra acknowledged that tariffs play a role in market growth but stressed that India’s luxury car market growth is more dependent on rising per capita income.
"Lower duties would help, but the real driver of luxury car market expansion is rising household incomes," he explained.
India’s household wealth pyramid has traditionally been very narrow at the top, but this is changing.
"By 2030, the middle class will have expanded significantly, creating a larger base for luxury car buyers," Malhotra said. "Also, today’s younger generation is more brand-conscious and ambitious than ever. When aspiration meets with rising income, the luxury segment will take off naturally."
Regarding tariffs, Malhotra stressed that it needs to be a two-way street.
"Either we lower duties to allow more imports or ensure that locally assembled luxury cars can be competitive. It can’t be a one-way street," he pointed out.
Volvo’s Journey in India: A Young Brand Laying the Foundation for Long-Term Growth
Although Volvo has been around for 97 years globally, its presence in India is still relatively young.
"Serious business operations only started around 2017-18 (when the company started assembly), and then we had the COVID years, so we are still a young brand in this market," Malhotra explained.
In the early days, Volvo was mainly associated with buses, but brand awareness has improved significantly over the past seven to eight years.
Earlier, most people didn’t even know Volvo made luxury cars. Today, that perception has changed," he noted. "However, we are still laying the foundation for the future."
India is on the cusp of a luxury market boom, and Volvo is preparing itself for when it takes off.
"The real question is not if, but when India’s luxury market will explode. And when it does, Volvo will be ready," Malhotra concluded.