The Swedish automaker’s turnaround plan has already shown its positive results last year, but the pace must be maintained to hit the brand’s 800, 000 sales target.
Volvo had the best year so far in 2015, reporting for the first time more than half a million cars sold in the company’s history. Last year’s achievement of the brand owned by China’s Geely, mostly boosted in the later stages of 2015, was mainly due to the launch of the new XC90 SUV. After such a sales hit, Volvo announced that the full-year operating earnings trebled compared to 2014. However, speaking at the Geneva Auto Show, chief executive Hakan Samuelsson pointed out that this was around half the level being generated by its competitors in the premium segment. “Volvo’s transformation is nowhere near complete. The company’s revitalization has been effective so far, but work remains to be done and we are entirely focused on the future,” he said. Therefore, the automaker needs to keep bringing new cars to revive sales and operations in the US, continue to grow sales in China, double the market share in Europe and reach its target of selling 800,000 cars globally.
Volvo is implementing an 11-billion-dollar transformation plan that has involved the development of its own modular vehicle architecture, a new engine range, an improved global manufacturing capability and to completely renew the product lineup. Larger 90 series and 60 series cars will be built on the Scalable Product Architecture, which will also be implemented on the global small car strategy. “Our new expanded global range of smaller cars will improve and broaden Volvo’s presence in an important and growing market segment,” Samuelsson said.
Volvo’s plant in Torslanda, Sweden, will in future make its 90 series top of the range cars as well as next generation 60 series, while its plant in Ghent, Belgium, will become a purely Compact Modular Architecture plant for new 40 series cars. A new facility in the US will become operational in 2018 and make 60 series SPA based cars and the lines in China will make cars for domestic use and for export. “We are developing a global industrial footprint that will mean we will primarily build cars in the regions in which we sell them. This is not only more efficient, but also provides a natural currency hedge,” the CEO added. As for the green models, Volvo said at least 10 per cent of annual sales would be electrified vehicles in the medium term.