Volvo has announced that it will enter the Indian market starting in Q4 2006.

The company cites a bustling Indian economy and a projected increase in new car sales there as the primary reasons behind the decision. The headquarters for the Indian division will be set up in Delhi, and three dealerships will be established in the country later this year.

Volvo is banking on its existing global reputation and name-recognition to make entry into this new market easier, and it will begin by marketing their two upmarket vehicles, the S80 sedan and XC90 SUV. Sales targets and a timetable for the introduction of the rest of the company's model range were not announced.

(Press release after the jump)

[Source: Volvo]

Press Release:

Volvo Car Corporation will begin selling cars in India

Volvo Car Corporation has decided to introduce its cars in India, with sales scheduled to start during the fourth quarter of 2006. The new subsidiary, Volvo Car India, will have its head office in Delhi. Volvo Cars will start its product introduction with the Volvo S80 and the Volvo XC90 and the plan is to introduce more models on the Indian market in due course.

"It is an important step for Volvo Cars to establish a presence in this market at a time when India is showing considerable growth in the passenger car market. Moreover, we believe that the timing is right in comparison with our closest competitors," says Volvo Cars President and CEO Fredrik Arp.

India is experiencing very favourable economic growth with low inflation and a stable currency. Total new-car sales on the Indian market are expected to increase from 1 million cars per year to 1.6 million over the next four years. "This gives us an excellent foundation for starting sales of Volvo cars in this market," says Volvo Car India's Managing Director Paul de Voijs. Volvo Car India will establish three dealerships in 2006 and the prestige models in the company's range, the Volvo S80 and XC90, will be the first to be marketed.

"All these models represent modern Scandinavian elegance and we are convinced they will be highly successful on the Indian market too," says Fredrik Arp. "Our objective is to build the already strong Volvo brand in India with quality prestige cars from Volvo," adds Mr Arp. Between 2006 and 2009, Volvo Car Corporation is facing the most aggressive launch period in the company's history with three all-new models: the Volvo C70, the Volvo S80 and the Volvo C30. Several additional models will follow during the next few years.