The new ’11 Volvo S60 sports sedan is an indicator of where the Chinese-owned, Swedish brand is headed, a top-ranking executive says.
Described as “naughty” in the auto maker’s marketing campaign, the S60 boasts more-aggressive and sporty sheet metal than Volvo models of the past and goes head-to-head with the best European sports sedans on the market, says Volvo Cars of North America LLC President Doug Speck.
“We can look any competitor in the eye and say (the new S60) is just as exciting or better,” he tells Ward’s. “And we’re going to continue to push that going forward. We want to challenge peoples’ perception of the brand.”
The S60’s design continues Volvo’s efforts to remain true to its Swedish roots, a strategy that will help separate it from competitors, he adds.
Speck is mum on other new products that may embody the S60’s sporty nature, noting future business plans still are being hammered out.
That’s to be expected with Volvo’s final transition fromMotor Co. to China-based Zhejiang Geely Holding Group Co. Ltd. in August.
Additionally, formerof America Inc. CEO Stefan Jacoby has come onboard to lead Volvo in a new direction. Speck recently spent several days with Jacoby, bringing him up to speed on the auto maker’s position in the North American market.
“(Jacoby) needs enough time to do his own research to decide on specific changes,” Speck says. “But he’s interested in the brand, interested in learning about the history of the brand and what it means today. And (he) will use that as a basis on what he wants it to be five years from now.”
Volvo long has had a reputation for building safe cars, and there are no plans to abandon the emphasis on safety under the new ownership, Speck assures.
“Although (other auto makers) are pursuing credentials related to safety, at Volvo, it’s foundational,” he says. “The reality is if you query 100 people on the street and ask them what the safest cars are, a high percentage will say Volvo.”
Jacoby already has expressed some ideas about where he would like to take the brand.
Media reports suggest a high-end sedan is in the works to go up against premium brands such as the Mercedes S-Class and7-Series. A small car along the lines of the BMW 1-Series also may be coming.
Speck admits Jacoby “has indicated he’s envisioned a larger flagship sedan. But it’s not priority.”
However, the smaller Volvo is a distinct possibility. “If you look at what all the competitors are doing and what’s going on across the globe, I think most of the brands are asking themselves” whether there are going to be emerging small luxury products, he says.
“If the answer is ‘Yes,’ you have to go and compete in that arena.”
Speck also confirms the next two Volvo vehicles due for a redesign are the flagship S80 sedan and XC90 cross/utility vehicle.
VCNA’s U.S. sales have been lackluster this year, down 6.6% in October to 3,996. In the year’s first 10 months, deliveries were off 11.8%, compared with year-ago, according to Ward’s data.
Speck says the sales decline largely is due to the auto maker’s effort to limit sales to rental fleets, as well as the weak U.S. market.
Sales of the S80 tumbled 32.1% to 354 units last month, while deliveries of the S40 plummeted 54.9% to 353. However, sales of the XC60 and XC70 CUVs jumped of 20.3% and 71.3%, respectively.
Despite the poor results, Speck says Volvo has no plans to fall back on profit-sapping incentives.
“If you look across the industry, everyone is trying to grow their business on the back of good products for a proper value and not resort to incentives to capture share,” he says. “(Incentives are) not a good long-term strategy.”
Regarding life under Geely, Speck says so far there is no difference, and the new Chinese owners are providing the management staff plenty of leeway.
“From Geely’s perspective, Volvo needs to run Volvo,” he says. “They are comfortable that’s the right way to run the business.”