Auto India (VAI) established its presence in India in 2007 and has since then
worked intensively to market the Swedish brand in this country. With a
corporate office in Gurgaon, Volvo Auto India opened its first dealership in
March 2008 and currently markets its products through outlets in New Delhi,
Mumbai, Chandigarh, Coimbatore, Hyderabad, Chennai, Kochi and Pune. The Indian
arm of the Sweden based firm company currently sells four premium models as
completely built units. While the luxury SUV XC90 & the luxury sedan S80
are imported from the Sweden plant, the compact luxury SUV XC60 & the
premium sedan S60 which are imported from the Belgium plant.
Before you joined Volvo Auto India in 2008, you
were with GM India. From a mass brand to a class brand, what’s the experience
been for you?
journey has been very good for me. At
Volvo, we have grown from 100 cars per annum to close to 800 annum by the end
of this year. So it has been a very steep growth for the Swedish luxury brand
in India especially when there is so much competition. But what the brand
inspires professionals to do is to get the best out of everything. This is
because Volvo is completely differentiated and distinguished from rest of the
luxury brands, not just in India but also globally. If you look at the way we
style our cars and the safety technology that we equip them with, we are the
first company in India that has Laser automated braking system which is very
relevant to bumper-to-bumper traffic.
That inspires a marketing person like me to do good things for the
Volvo Auto India initially started with a few
volumes. But of late, the company has seen an unprecedented boom. So what have
been the primary reasons for the sales jump? Is it because people are gradually
becoming familiar with the Swedish brand? Or is it because you have now got in
the right products?
we always had very good products. The jump in sales is primarily because we
have actively started marketing them. Until 2011, we were looking at ways to
lay the foundation that involves putting a good service team. So whatever a few
100 cars that we sold, we ensured that those customers should be happy. Once we
have passed that gate, we move to attract newer customers who are not very
familiar with Volvo. Now we have incorporated fuel-efficient D3 engines in our
portfolio at competitive price points. So that has attracted a newer target
group. This is coupled by the fact that we started with S80 and XC90 and now we
have S60 and XC60. So it’s a bit of both of the strategies i.e. marketing and
How has the luxury car segment evolved in India?
I were to say about the luxury car segment in India 8 years back, it was hardly
anything. Today, in the larger scheme of things it is not more than 1-2pc of
the total car market. So the size of the market is still very small. Having
said that, this segment has witnessed an unprecented jump in CAGR for the last
few years (2009-11,000 units, 2010-16,000 units, 2011-23,000 units) and is
poised to touch 30,000 units during this calendar year. So there is a lot of
space for luxury scars to grow into the better set of automobiles sold in
Volvo had chalked out an aggressive investment worth
`15 crore this year for marketing activities. Could
you shed some light on that? And what amount have you earmarked for similar
activities next year?
don’t have a fixed percentage for any specific advertisement medium like
mainline, direct marketing or events. We don’t apply such a formula. I
personally believe marketing is ‘Creativity’. It is basically the need of the
hour. So whenever there are shopping festivals, we do car displays in malls.
Whenever there is IPL happening, we do outdoor activities around the stadium at
that point of time. So there is not set principle that I have earmarked an ‘X’
budget for a ‘Y’ activity or ‘A’ budget to ‘B’ activity. It is always the new flavour that we need to
capture in terms of marketing, brand building, etc. This year, we launched two
new properties one is the Volvo Golf Challenge is our global amateur golf
tournament which is being done in 6 cities with the final in Amby Valley. The two winners from the national final will
win an invitation to compete in the World Final in South Africa of the ‘Volvo
World Golf Challenge’ next January. And that World Finals will be with
professionals (pro-tour). So that is the uniqueness that ‘Volvo World Golf
Challenge which no other car brand brings. The tournament has been accepted
very well. We are actually humbled by the responses that we have got. Even going forward, we will try to build on
these activities for next year. But some strategies that work in 2012 may not
work in 2013 or so. So one has to be very dynamic when doing these kinds of
things. During the next calendar, the there will be an increase in the budget.
As part of its marketing strategy, you were the
“Official Car Partner” for the Lakme Fashion Week (LFW) with Fashion Diva Ritu
Beri showcasing designs called “Icons of Luxury” that have stemmed out of a
common philosophy of “Designed around You”.
How has this entire synergy worked for you in terms of building the
company’s brand equity?
got into fashion because of our global philosophy of ‘Designed around You’. So
the Volvo car, which is very fashionable, is actually designed around people
whether it is design, safety, comfort, environment etc. It‘s about making a
life less complicated. So a Volvo car is very warm from inside, but cool from
the outside. That is what the crux of
the brand is. So today, the component of design, styling, etc. has grown
exponentially in our philosophy. That is
what we call a ‘modern Scandinavian design’. Coming back to our association
with Ritu Beri, Volvo as an international brand will obviously seek partnership
with brand friends who are again global who are very well know in their spheres
of expertise. So Ritu Beri was the first
Fashion Diva from India who predominantly does fashion shows in Paris now. So
she has that international appeal, lineage and also clientage. That’s what got
us together and we both decided to showcase designs called ‘Icons of Luxury’.
Besides golf, what are the other ways you will be
engaging with your target audience?
are looking at launching a new engagement property next year which will be
focusing more on the showcase of our SUVs. We have not named this property, but
it will be like an experiential programme.
Volvo is known to focus more on out-of-home
sourcing and on-ground events than television commercials. Is there any
particular reason behind it?
a very tough question to answer. I can’t say that television is not important.
But at this juncture, for a television medium a brand must have a footprint all
over India. That is something we are actively working on. There are some key
cities where we are not present in. We are looking at dealerships in various
cities and by the end of this year we will have 3 more outlets in new cities.
And when it comes to brand promotion, are you not
betting big on the digital space?
and No. I was working for a brand which was amongst the first in marketing and
pioneered in the digital space (in India). When I was there, I started the
whole concept about allocating a specific budget on the non-traditional medium
without expecting anything in return. When we did that, the company got good
results. Then we learnt the whole process. But in Volvo, we are not positioning
ourselves as a mainstream brand. So as a luxury brand, we see this space more as
a talking tool than a selling tool. With
due respect to the internet users, not many of them who click on online ads
have immediate plans snap up our products.
Unlike mainline communication, we really don’t know who our prospective
customers are. We also purposely mention the prices of our products on the
advert so that our customers are able to decide before making a enquiry call at
our dealer’s end.
What is your sales target for this year? And next
year, what would be the numbers that you would be looking at?
are looking at selling 800 units this year as compared to 326 units in the same
period last year. Next year, we are looking at a healthy double digit growth
from what we are today. This will be underpinned by our enhanced distribution
network and new rollouts. However, all models will be sticking to the
Completely Built Unit (CBU) route.
You have gone on record saying that Volvo will be
launching a new model every year consecutively for the next five years. And
next year, you have lined up V40 Cross Country Crossover. What are your expectations from this model?
What will be its price range? Will it be a gamechanger for the company?
you are right. But I don’t know whether I should call the V40 a gamechanger.
Because there are a different ways at looking at a gamechanger like volumes,
profits, etc. So a gamechanger in our parlance is not a volume but more
financial health. If you compare our products with our competitors’ CKD models,
the prices that we offer (on CBU models) are actually better. If you look at
the history of pricing in India, no competitor has got the price down after
assembling their products. They have
introduced low-end variants at cheaper prices.
As far as the V40 is concerned, it will be priced very competitively even
after sticking to the CBU route. It will be somewhere in the price bracket of
BMW X1 to Mercedes B-Class. I don’t know what will its volumes be, but I a
confident that it will be a good brand shaper because that’s the latest
offering from Volvo globally. So everything from styling, comfort, safety, etc,
will be class-leading. Even though it
will be a small car, it will be packed with a lot of luxury features. There is an option of putting a
fully-integrated glassroof, TFT Instrumentation Panel et al. These are fitments
which are not available in an entry-level luxury segment car. So what we will
put for India and how we will configure it is something we are currently
Like your rivals, are you also of the view that
associating with motorsports activities like F1 can give a major fillip to the
brand? If yes, what are you doing on that front?
are so many automotive brands that are into F1 and yet not selling cars. Even
if they do, not all of them are successful. Some of the successful brands are
actually not in F1. So F1 is a different level of motorsports which has a
different aura and imagery. But it doesn’t mean if you are not in F1, you will
not be successful. There are different
ways of enhancing our brand equity. If F1 was the only brand shaper, then there
won’t be 24 players vying for the championship title and there won’t be 12
teams on the grid. If F1 was the only
way to showcase one’s technological prowess, then there could have been 120
teams on the grid. Moreover, a couple of
brands have pulled out too. So buying a car and being into motorsports are two
different ballgames. Globally, we are also into motorsports in a different way.
We are a participant of the World Touring Car Championship (WTCC), which is an
international Touring Car Championship sanctioned by the Fédération
Internationale de l’Automobile (FIA). Those are very region-specific events.
Our endeavour is actually to showcase more on the safety and the environment
rather than speed, thrills, etc. This is because at the end of the day, what
our customers end up buying is miles away from what the F1 car has. And as far
as hosting any activities on the BIC is concerned, I am not so sure about it. I
want to give or show people what they buy and not something like a racecar
which is not sellable.
Luxury carmakers are now seeing record demand from
small cities of India. Don’t you think you are missing a golden opportunity at
a time when your German rivals are expanding your distribution base?
Like I mentioned earlier, we are too expanding our
distribution base. I don’t actually see a rivalry with the German brands but
within them. This is because our brand is very different from them. The kind of
people that we attract is perhaps slightly different from the one our competitors
attract at this point of time. And we want to do things in a different way to
attract that kind of an audience. Thenceforth, we aim to make more and more
people distinguished decision makers of purchase. This is enabling us to work
in a slightly different cocoon following the ‘Blue Ocean Strategy’. We are
therefore not bogged down by our total volumes.
Do you think a brand ambassador will enhance the
popularity of the Volvo brand?
we have roped in brand ambassadors only in China and the US. In India, we are already having our 1,000
happy brand ambassadors i.e. our customers. In India, it will be very expensive
to get endorsed by someone when the numbers are not that huge. So once the
there is a cost equation, we might consider it. But what we prefer doing is
having brand friends.
Lastly, what is your vision for the company when it
comes to marketing and PR activities?
would like to do things in a very innovative way. Like the way we have
embellished our office reception in Gurgaon. In the automotive sphere, we were
the first ones to come up with Ipad applications (in Oct’10). We have been the
pioneers in executing innovative strategies like the Golf Tournament. The trophy
christened ‘Blue Lotus’ was not made by us but by a renowned Indian glass
artist. So the vision we have for the
Volvo is that we want to make it a very progressive and desired luxury brand in
the market by 2020. That could mean in numbers, but it should mean more on the
equity front. Once you attain the equity, the numbers will definitely follow.
It’s not necessary that a big jeweller is richer than a small grocerer. Even a
small grocer can have a better cash flow and a higher income with a better margin
than a big jeweller. So it all depends on what you are looking at. At the same
time, we are offering the right price tag to our customers without resorting to
any discounting tactics.