Volvo expects India luxury-car market to triple by 2015

Volvo Car Corp., the Swedish automaker that Ford Motor Co. is selling to China's Zhejiang Geely Holding Group Co., expects India's luxury-car market to triple by 2015 on rising wealth.

Cars priced at more than 2.5 million rupees ($54,000) may account for about 1.5 percent of industrywide sales in five years, said Paul de Voijs, managing director of Volvo's India unit. Total registrations in the country will reach between 2.5 million to 3 million units annually, he said.

Volvo, Bayerische Motoren Werke AG and Daimler AG are introducing new luxury cars in India as incomes surge in the world's second-fastest growing major economy. The number of people with more than $1 million of financial assets is estimated to more than triple by 2018 from 84,000 in 2008, according to Capgemini SA and Merrill Lynch Wealth Management.

"There is still a large untapped demand for luxury cars in India," said Voijs. "I have seen people with 12 luxury cars in a family in India. It shows there is a lot of wealth and lot of possibility for further growth."

Volvo plans to start selling two new models in India by early 2011, Voijs said. One of these will start selling in the first half of this year, he said.

Asia's third-biggest economy is expected by the government to expand 8 percent in the year ending March, up from 6.7 percent in the fiscal 2009. Per capita incomes have doubled from 2003, rising to 37,490 rupees.

Car sales rose 19 percent last year to 1.4 million, according to Bloomberg data.

Last month, Ford agreed with China's Geely on most terms for a sale of Volvo. The automakers will probably sign a definitive agreement by March 31, with a sale completed by June 30, the companies said in a joint statement on Dec. 23.