Volvo US chief targets 25% sales growth for 2012
Volvo's new US boss John Maloney expects stronger sales in 2012 as supply improves and Chinese ownership brings stability, despite a limited pipeline of new models.
Volvo Cars’ new US chief John Maloney expects the brand’s American sales to climb by 25 percent in 2012, aiming to deliver more than 65,000 vehicles as improved supply and increased marketing spend take effect. The target, announced at the start of January 2012, follows a year in which Volvo struggled to meet demand for key models due to tight inventory.
Maloney, who took over as CEO of Volvo Cars US in late 2011, said the company’s growth ambitions are underpinned by Chinese ownership, which he claims has brought new stability and resources following Geely’s acquisition from Ford. The brand’s 2012 target would represent a sharp rise from the 53,948 units sold in 2010 and would outpace the overall US market, which analysts expect to recover further after reaching its highest level since 2008.
Supply constraints and production response
Volvo’s 2011 US sales were held back by shortages of the XC60 mid-sized crossover and the S60 saloon, both of which saw strong demand. Maloney said the company is increasing production in Sweden to address these bottlenecks, with improved availability expected in the first quarter of 2012. The S60, redesigned and launched in late 2010, was the biggest driver of growth, with its 2011 US sales up by 18,000 units to 19,331.
Maloney attributed some of the brand’s optimism to a surge in marketing investment. Volvo doubled its US advertising budget in 2011 compared to 2010, focusing on national cable TV campaigns. Kantar Media data shows spending reached $42.5 million in the first nine months of 2011, up from $31 million for the whole of 2010. The company expects this visibility to support dealer traffic and brand awareness into 2012.
Product pipeline and market outlook
Despite the bullish sales target, Volvo’s US product pipeline for 2012 is limited. The only notable change is a facelift for the XC90, due in January. Maloney said the company expects to maintain momentum with its existing line-up, banking on improved supply and marketing rather than all-new models. He forecasts further growth of 8 to 10 percent in 2013, in line with expectations that the US light-vehicle market will reach 13.5 million units.
- Volvo S60: Redesigned saloon, main sales driver in 2011.
- Volvo XC60: Mid-sized crossover, experienced supply shortages.
- Volvo XC90: Facelift planned for January 2012.
Volvo’s US performance remains closely tied to the availability of its most popular models. The company’s efforts to boost production and marketing are intended to build on the momentum created by the S60 and address the missed opportunities caused by last year’s supply constraints. With no major new launches, 2012 will test whether these measures are enough to deliver the ambitious growth Maloney has set out.
