NEW YORK –Volvo Cars has a firm volume target of 600,000 units annually in 2009, says President and CEO Fredrik Arp.
However, he predicts a flat year worldwide in 2006.
“This is a build-up year with a heavy changeover to the S80 in midyear,” Arp tells Ward's at the New York International Auto Show here. The new flagship is slated for the U.S. market in first-quarter 2007.
Meanwhile, Anne Belec, president and CEO of Volvo Cars North America Inc., says the new C70 now launching in the U.S. will rack up sales of 6,000-8,000 units in a full year – about double the number of C70 sales in 2005.
She predicts disappointing first-quarter results will be turned around in the rest of the year.
“We have attracted new customers with the S40 and V50,” she says, citing a 40% conquest rate.
Globally, Arp admits Volvo will need additional models to achieve its worldwide growth goals. He promises that Volvo will produce such products without specifying whether they will be trucks or cars.
Volvo’s strongest growth will occur in Asia and South Africa, while North America and Europe will experience “proportional growth,” Arp says, declining to specify percentage gains for the various export markets.
“We have a very solid growth plan for North America,” he says.
One of the lynch pins of this strategy is the introduction of the C30, a new entry-level model scheduled to debut this fall at the Paris auto show and go on sale in the U.S. in mid-2007.
“We have high hopes for that product,” Arp says. “We think the C30 will be a hit.”
The auto maker has not yet decided whether there will be a wagon version of the C30, despite the fact Volvo dominates the wagon market in some countries.
The C30 will be built in Volvo’s Ghent, Belgium, plant, on the same line as the S40. Volvo builds about the same number of units in Belgium as it does in Sweden.
The auto maker has no plans to build vehicles in North America even though its parent,Motor Co., has lots of unused capacity.
Volvo once assembled cars at a plant in Nova Scotia, but discontinued the Canadian operation in 1999. “It doesn’t make sense to make Volvos in North America now,” Arp says.
Safety still is the iconic characteristic of Volvo vehicles, Arp says. But he predicts such things as Scandinavian design with its simple clean lines and competent performance also will attract new buyers. “Consumers are more demanding today,” he says.
Besides safety, the average European buyer wants driving dynamics in a vehicle. “We’re doing it in our own way,” Arp says. Without compromising safety, he says the east-west installation of new, more powerful engines in Volvos improve performance.
Volvo has introduced a new inline 6-cyl. engine in the S80, and the same model also will offer a V-8 previously available only in the XC90 cross/utility vehicle.
Volvo is stressing the brand’s environmental policies to attract customers concerned about global warming.
“Most European car makers are doing that, and we are doing it also,” he says, noting Volvos are made of 85% recyclable materials. With the increasing cost of materials, this policy more than pays for itself, Arp says.