Volvo Ponders 2-Pronged Diesel Strategy
By Eric Mayne WardsAuto.com, Jan 15, 2008 1:18 PM

DETROIT – Volvo Cars of North America LCC may offer fuel-sipping diesel engines at both ends of its product spectrum, President and CEO Anne Belec says.

“The big cars need (diesels), but who is (fuel economy) important to?” she says, referring to small-car buyers.

During a wide-ranging discussion at a North American International Auto Show media reception here, she offers no hint about timing, saying only Volvo is “too small” to lead the diesel charge into the U.S. market, where the technology suffers from a stigma created by the poor-performing engines of the 1970s and 1980s.

The Sweden-based auto maker is content to let luxury-segment stalwarts BMW AG and Mercedes-Benz break the ice with U.S. consumers.

Meanwhile, Belec tells Ward’s there is hybrid technology in Volvo’s future. She again declines to discuss timing but suggests the first application will be North America.

“How many hybrids do you see in Europe?” she asks.

Looking ahead, Belec predicts Volvo’s North American sales will fall 10%-15% this year as the overall market declines. Volvo has no significant product launches this year – although the brand has high hopes for its C30 hatchback that went on sale in October.

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Volvo sold 2,090 C30s through December, according to Ward’s data. The auto maker’s sales were down 8.3% to 106,213 units in 2007 from 115,807 prior-year.

Belec notes the brand resonates particularly well with women due to its strong reputation for safety, with 57% of buyers female.

As for the pending breakup of Ford Motor Co.’s Premier Automotive Group, of which Volvo is a member, Belec says her brand will continue to be based in Irvine, CA, because the building it shares with Jaguar Land Rover North America is under a long-term lease.

emayne@wardsauto.com