Volvo: 800,000 Sales a Year by 2020, Highlighted with GreenBy AutoObserver Staff November 17, 2010
By Michelle Krebs and Danny King
Swedish brand Volvo, now owned by China's Geely, has its sights set on selling 800,000 vehicles a year around the globe, with a heavy emphasis on environmentally friendly models, Volvo CEO Stefan Jacoby said in his keynote address to open the Los Angeles Auto Show today.
"If we play our cards right, I can imagine Volvo selling 800,000 cars per year by 2020," said Jacoby, who left Volkswagen of America in summer to head Volvo under Chinese ownership.
Volvo will have to play its cards right. In 2009, Volvo, which was then owned by Ford, sold only 334,808 vehicles worldwide, down nearly 11 percent from the year earlier. In 2010, Volvo sales have begun to recover, with 272,555 vehicles sold during the first three quarters of this year. Jacoby forecasted the full year 2010 to come in at 380,000 vehicles sold.
"We will sell about 380,000 cars this year. Even if we sell 800,00 (i.e. the number he forecast for 2020), we can't reach the same scale of our core competitors that can use their corporations to achieve a higher scale of economics, so we have to look for smart solutions."
Added Jacoby: "Our strategy is based on our products and markets to define our future. In the next six months, we will put together the growth strategy that will take us there."
Jacoby said Volvo will focus on three core markets: Europe, where it intends to increase market share to 2 percent; China and the United States. Volvo also sees growth potential in Brazil.
U.S. Nowhere But Up
"I have to be humble and admit that after our peak year with 140,000 cars in 2004, we have lost ground here in the United States," said Jacoby, who blamed Volvo's lost ground on the economy and its accompanying credit crisis along with a negative currency situation.
Jacoby suggested that with Volvo at rock bottom, it has only one direction to to go in: up. He promised more attractive products, improved customer care and strengthened market and dealer activities to improve sales.
"The recent launch of the S60 will be an essential part of the growth plan in the United States," Jacoby said. He noted four Volvo models achieved a recommended rating in the latest Consumer Reports reliability survey; the C70 convertible was best in its segment; the XC60 was second best in its segment and the C30 was third in its segment.
Volvo's U.S. Performance
China: Growth, New Plants
Volvo will "in the next couple of weeks announce its growth plan for China, where Volvo has had a presence for decades, but, noted Jacoby, Volvo currently has limited local production. Media reports have been reporting Volvo plans to open additional plants in China.
"So far this year, our sales in China are up almost 50 percent versus 2009," he said. "Our Chinese shareholders open up possibilities for a significant expansion."
Added Jacoby: "We have to look at the classical sedan segment. We are looking for cars in the bigger size than what we offer right now...Chinese consumers demand bigger cars. It's a chauffeur-driven market."
Still, despite its Chinese ownership, Jacoby insisted as Geely chief Li Shufu has that "it is essential that Volvo will continue to be Volvo. And Volvo will be even more Volvo than ever before," Jacob adding, suggesting Volvo wasn't as Volvo under Ford ownership. Indeed, Ford's parenthood often rankled those at Volvo.
"Volvo stands for Scandinavian design, solid quality, reliability and safety," said Jacoby. "We will maintain these values. We will add a couple other brand values, but we will not give up our quality standards, safety standards and automotive technology."
Jacoby said little about Volvo's plans in Europe.
Emphasis on Green
Green will be a major part of Volvo's global plans, jacoby said. At this fall's Paris motor show, Volvo displayed the C30 DRIVe Electric, a totally electric vehicle that uses U.S.-made lithium-ion batteries.
The model will be introduced in a California test fleet next year, he said. He added that, living up to Volvo's reputation for safety, the C30 DRIVe has been extensively tested and acehives a five-star rating in the EuroNCAP.
Volvo will introduce a plug-in hybrid in 2012 that it will launch in Europe with a diesel engine backing up the electric motor. A similar plug-in hybrid with a gasoline engine from Volvo's next-generation of engines will be sold in the united States.
Jacoby said Volvo in the future will offer more hybrids on other models and it is working on downsized gasoline and clean diesel engines for hybrids.
"We will use them to empower our downsized gas engines. It is necessary to start now. It will take quite a lot of time, but we have to start now," he said.
Michelle Krebs is Edmunds.com senior analyst and editor at large.
Danny King is a frequent contributor to Edmunds' Green Car Advisor.
Graphics by Edmunds.com's David Greene
Photos by Volvo
1 - Stefan Jacoby left Volkswagen of America last summer to become CEO of Volvo under Geely ownership.
2 - The newly introduced Volvo S60 will become a centerpiece for the brand in the United States.
3 - The Volvo C30 DRIVe was displayed at the Paris motor show this fall.