Volvo Cars is keeping plans for local assembly in India on hold because current sales volumes are not high enough to justify the cost of a plant.

Around 35,000 luxury vehicles are sold yearly in India but Volvo sold only 1,423 in 2015 compared with Mercedes-Benz sales of 13,502 units, local website shifting-gears.com reported.

Local assembly would reduce the cost of cars and boost sales, the report said.