There are various trims on the above models which affect the pricing however, there cannot be such a humongous difference in their price positioning in the US and in India.
BHPian adasisthefuture recently shared this with other enthusiasts.
On a detailed analysis of Volvo’s pricing of the vehicles it is selling in India with that of the U.S. market, it appears that Volvo has overpriced its SUVs in India compared to the Sedans.
The above can be verified by the price range in which Volvo has put its different vehicles in the US market compared to Indian Market. Volvo’s prices can be verified on the following links:
- https://www.volvocars.com/in/ (For Indian Prices)
- https://www.volvocars.com/us/ (For US Prices)
Volvo sells three ranges of cars in India – the 40 Series, the 60 Series and the Flagship 90 series. Its SUV lineup begins with ‘XC’ and the sedans begin with ‘S’
In India, Volvo sells XC40 at 46,40,000/- ex-showroom. Just before it was discontinued, Volvo’s S60 sedan was also priced similarly at 45,90,000/-. It is pertinent to note here that in the US, the MSRP of XC40 is $36,350 while that of the S60 is $41300 i.e. the S60 is costlier by $5000 in the US while in India there is hardly any difference.
Further, in India, the price of Volvo’s Flagship sedan S90 and that of Volvo’s mid-range SUV – the XC60 (not a flagship) is quite similar i.e. 67,90,000/- for the S90 and 67,50,000/- for the XC60. Contrary to this, in the US, MSRP of the S90 Sedan starts at $57,000 while that of the mid-range XC60 SUV is only $43,450 i.e. a difference of a whopping $14000 between the two. Interestingly, the S60 Sedan and the XC60 SUV are priced very similarly in the US while Volvo has highly overpriced the XC60 SUV in India by bringing its ex-showroom price almost at an equal level (only Rs.50,000/- less) to their Flagship Sedan- the S90.
Further, the MSRP of Volvo’s Flagship SUV – the XC90 starts at $56000 (shockingly $1000 cheaper than the Flagship Sedan S90) while the difference in pricing between the two flagships in India is a whopping Rs.30 Lacs (XC90’s ex-showroom price in India is 98,50,000/- while that of S90 is 67,90,000).
Of course, there are various trims on the above models which affect the pricing however, under no circumstances there can be such a humongous difference in their price positioning in the US and in India. It is also pertinent to note that none of the models I have analyzed above is a CBU so as to justify that one model is costlier in India due to taxes levied being fully imported while the other is a CKD and so on.
From the above analysis, it appears that looking at the craze of SUVs in India, Volvo has overpriced its SUV range highly in India compared to the Sedans which are not in fashion these days. However, if that is the case, it is certainly highly unethical for a reputed Company like Volvo to do so.
I would request learned members in this forum to share their views on the reasons for such disparity in pricing of the different models and in case it is concluded that Volvo is really overpricing its SUV range in India, whether it is prudent for Indian car buyers to buy the SUV range of Volvo at a premium of 20 to 30 lacs rupees and whether going for a Volvo Sedan priced fairly makes more sense.
I have not found any discussion on this issue, subject to correction, anywhere on the internet and therefore I am posting it in this forum for consideration of learned members of this esteemed forum.
Here’s what BHPian V.Narayan had to say on the matter:
Permit me to offer a counter point of view here.
Too often I hear this lament on Team BHP of a car being over priced. Over priced compared to what – usually compared to our pockets and the mismatch between our desire and our financial ability. This mentality of overpriced is a hangover from our license raj-socialist days where the bureaucrats wanted to control what we produced, how much we produced and what price we sold it for but took no ownership of the fact that as a consequence companies went sick and the economy failed to grow in a healthy fashion.
USA and India are two different markets with differing tax structures, distribution costs and overheads and most importantly volumes. It is only natural that a seller will try and place a premium price on a hot selling product and a discount on the slower selling one. That is how markets work and OEMs/Entrepreneurs make it worth their while to even stay in business.
A seller is free to sell at a price he/she wishes to. A buyer is free to buy at a price point that he/she wishes to. When the two sets intersect a deal occurs. I wish to holiday in Oberoi’s Udai Vilas property but cannot afford the price so I announce it is overpriced!!! That is what happens often on Team BHP.
Overpriced is a notion always relative to our pockets. But there is some buyer out there for whom the price is okay and that is why the product sells.
Here’s what GTO had to say on the matter:
Make money on what sells & try to competitively price the ones that don’t sell. A handful of cars in India are sold at near cost just for presence and / or market-share.
I usually agree with your posts, V.Narayan, but you missed the point here.
OP is stating that the % difference between Volvo SUVs (USA and India) is far greater than the % difference for its sedans (USA and India).
Affordability has absolutely nothing to do with comments on Team-BHP that call a product “overpriced”. I can buy the C5 Aircross, but still insist that it’s a grossly overpriced product (seems the market agrees with me too). I could also buy other cars like the Mobilio, Meridian, Kushaq 1.5 etc. but have called them out for being overpriced. Seems the market has agreed with me on all of these too.
You are mixing up what one can afford, with what one deems overpriced.
Here’s what BHPian Hayek had to say on the matter:
Comparing car models sold in different markets is a mug’s game – for India vs the US, the emission norms, power trains on offer, interior trims, other features that you can option elsewhere and taxes vary widely. Ultimately, any manufacturer charges what the market will bear, and price relative to competition. So prices for even identical products can be very different – and comparing prices between the entry level variant of a car in the US with the trim sold in India makes even less sense.
On the premium for a SUV vs a Sedan of similar size, that is a call for you to take. I happily bought an X3 for roughly the same price as a 5 series, because I valued the higher ground clearance, high seating, the greater knee room and better boot space in the X3 – a friend who was buying at the same time bought the 5 series since he valued under-thigh support and the more comfortable rear seat of the 5 vs the narrower squab of the X3. Drive both and decide based on options available to you, don’t waste your energy on what a car sells for anywhere else in the world.
Here’s what BHPian androdev had to say on the matter:
Your observation is correct and it’s a great method to understand which offering is VFM in our country. Indian customers are willing to pay a huge premium for ground clearance (SUV), fuel economy (diesel, disrupted by recent regulatory risks) and reliability(Toyota), etc. and most companies tweak their prices to take advantage of these market preferences.
You can’t blame a company for their pricing strategy or call it unethical. Why are you expecting them to sell with a consistent “cost + fixed margin” formula across markets and segments? Apple sells their watch products at a price similar to their entry level laptops – just incredible, but they are able to sell and people are buying.
My suggestion is to use this global price benchmarking info to find a VFM product and see if your requirements are met by any of these VFM products. Many people bought Hyundai Ioniq because it’s seen as VFM in India when compared to other markets. No point complaining that Fortuner is not VFM in India if that’s the only car you want to buy.
Here’ what BHPian avira_tk had to say on the matter:
I think we’re going overboard comparing prices in the US, the biggest market, versus a rounding error place like India. People aren’t paying for any sedans here and the market is dying, while any suv is at a premium. No company should pass up a profitable sale, that’s the only ethical thing to do.
The XC series is expensive because it’s desirable. If I was shopping for a luxury suv the XC60 would be on top of my consideration list, at the same time, if I was planning on a sedan, the S60 / S90 won’t be in consideration. Volvo has figured this out and charges accordingly.
The US also has a system of dealer makeups, so list price can be jacked up by 200% without any restrictions. The average selling price is what matters, not the bait pricing used for generating footfall.
Here’s what BHPian ABHI_1512 had to say on the matter:
Don’t know about Volvo, but there are many examples of cars being overpriced in India. Some tanked without a trace and some continue to be successful.
Cars like Ford Fiesta, Toyota Yaaris come to the mind immediately when discussing cars which were overpriced and which flopped despite being competent products. People rejected those cars not because they couldn’t afford them but simply because they didn’t find the money’s worth when other manufacturers were providing better.
Some cars like Toyota Fortuner or a Jeep Compass are overpriced now but their manufacturers know that they can get away with it since there is not much competition or options in those particular segments. Jeep though has got cars in the segment of Compass now and that has resulted in sales being affected.
A classic case which the members might recall is the reduction in prices of Ford Ecosport as soon as the launch of Suzuki Brezza was announced. Ford reduced the prices to the tune of 1 lac which proved that they were just minting money from the segment first car. Manufactures will price their cars according to their fancy, but to not question the overpriced cars and to attribute it to affordability is something I don’t agree with.
GTO has right pointed out the same in the post above.
Keyword: Is Volvo overpricing its SUVs in India when compared to its sedans