Chinese Owner Taking Hands-Off Approach, Volvo Exec Says

STOCKHOLM – Volvo for the “first time is a stand-alone company,” CEO Hakan Samuelsson says in a reference to the automaker’s relationship with its China-based owner Zhejiang Geely.

Zhejiang Geely “took the right approach and has not sent in experts and controllers,” he tells WardsAuto during a media event here. “We’re not this division executing commands from some central (company).”

Volvo was sold by Ford to Zhejiang Geely in 2010. Under Ford, the automaker was required to use joint platforms and share parts among multiple brands, as well as keep a tight rein on costs.

While Volvo now enjoys greater autonomy, it still works closely with its owner, Samuelsson says, noting there is much Zhejiang Geely can teach Volvo about the Chinese market, which is an integral part of the automaker’s growth plans.

“We’ve had passionate discussions about what we need to do to grow in China,” he says. “We’ve learned a lot about the market requirements, which I think will be valuable in the U.S., as well, because the big-sedan segments are very similar (in both countries).”

One lesson Volvo learned about the Chinese market was that many luxury consumers prefer to be chauffeured, rather than drive themselves. The S60L, which features a stretched wheelbase, will be exported from China where it is manufactured to the U.S. beginning as early as next year.

“That could be a candidate for the U.S. as an additional offering for U.S. customers,” he says. “That’s what they’re looking into. Next year you could see the S60L in the U.S.”

Volvo sales have been declining in the U.S. Through August, Volvo’s U.S. deliveries fell 10.9% vs. year-ago to 39,184 units, according to WardsAuto data.

Samuelsson says the drop largely is due to lack of product. The automaker offers only six models: the S60 and S80 sedans, V60 and XC70 wagons, and the XC60 and XC90 CUVs. Most are in need of updates, particularly the S80 flagship sedan, which hasn’t been overhauled since 2007.

“We need a broader product offering, and (the XC90) is a very important step,” he says. “Today we’re addressing broadening our offerings.”

Even with new products, Volvo has work to do to reestablish its credibility in the U.S. luxury market.

Samuelsson says Volvo will invest more in marketing and push its message of “real safety,” rather than simply touting its 5-star NHTSA ratings like many other automakers.

“We have to go beyond tradition and show we have high-tech safety,” he says, adding Volvo’s “Mission 2020,” which is the automaker’s stated goal to have no fatalities in a Volvo car by 2020, as well as autonomous drive technology, will be heavily marketed.

It also aims to offer more value for the money than its competitors. Volvo in the past has often been described as a near-luxury brand, a reputation Samuelsson wishes to shed.

“Volvo should move in the direction of premium cars,” he says. “We should be an alternative to the Germans. Not by copying them, but by offering something attractive that is different. And I think we’re doing that.”

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