Volvo Embraces New Ownership; Plans for Significant Growth

Special Coverage

State of Industry: North America

Volvo appears to be adjusting well to new ownership following its sale last year to China-based Zhejiang Geely by Ford.

The Swedish auto maker barely has missed a beat, rolling out several well-received vehicles, most notably the XC60 cross/utility vehicle and S60 sports sedan.

Volvo’s U.S. sales through October were up 26.5% to 57,054 units, according to WardsAuto data.

The auto maker says it plans to leverage its Scandinavian design in future products as well as its powertrain lineup consisting mostly of 4-cyl. engines. Volvo has laid out aggressive growth plans in China, where its new ownership likely will provide an advantage.

In March, Volvo named Doug Speck, who was serving as president of Volvo Cars of North America, to the global position of senior vice president-marketing, sales and customer service. He now is tasked with helping manage growth plans while maintaining the auto maker’s reputation as a leader in safety technologies.

The 30-year industry veteran says in an interview conducted by email that he sees good things ahead for Volvo, praising Geely for its intent to leave the brand unchanged, while helping the auto maker develop a credible plan for significant growth.

WardsAuto: Has the economic recovery taken hold, or do you fear the U.S. is headed for a double-dip recession?

Speck: This one’s a bit above my pay grade, but I have a gut feeling that the answer is, neither. I think the economy is still struggling and that it will be a long upward climb. It may stumble here and there, but I don't think a double-dip recession is in our future.

WardsAuto: What do you expect to be the next game-changer in vehicle technology?

Speck recently named senior vice president-marketing, sales and customer service.

Speck: There's no single magic bullet, but in the immediate future I believe car companies that can make effective strides in fuel economy and carbon-dioxide reductions will be winners. I think we'll get there in various ways such as electrification and hybrid technology.

Volvo, for example, will be introducing a family of 4-cyl. engines in a couple of years that will be the basis for our gasoline and diesel strategies going forward: fewer cylinders, better fuel economy, less pollution and equal or better performance.

WardsAuto: Other than the economy, what is the biggest single threat to your business? In other words, what keeps you awake at night?

Speck: The ongoing fluidity of regulations around the world. Now that I'm in a position of global responsibility, I see how amazingly complex regulations can be from one country to another – and how they can have a significant tactical effect on long-term strategies. Heck, even getting all 50 states in America to act similarly would be a welcome change.

WardsAuto: How do you see the vehicle-segment mix changing in the U.S. in 2012? How will your business be impacted?

Speck: I think the core segments in the luxury business will continue to be sedans and crossovers. However, you are likely to continue to see more stylish coupe-like sedans. Additionally, I believe it is very likely downsizing will continue, so the ability to profitably play in the entry-level segments is going to be very important.

WardsAuto: Which one of your 2012 vehicle launches do you think will have the greatest impact on your business, and why?

Speck: The ’12 Volvo S60 has had the greatest impact on our business in America. The car is a winner. It's our No.1-selling vehicle. Customers love it, dealers love it and the media love it. It's won more awards than any other Volvo since we introduced the XC90.

I should point out the T6 engine in the S60 was named to Ward's 10 Best Engines list. We will continue to focus on developing that core nameplate with new derivatives in the 2012 calendar year.

WardsAuto: What is Volvo’s greatest strength going into 2012, and what do you feel you have to improve upon?

Speck: Our greatest strength is we're fulfilling our promise to consumers to provide products that provide beautiful Scandinavian design, matched with a fun-to-drive experience, advanced technology and superior safety.

Our two most recent vehicles, XC60 and S60, are awesome. They compete very effectively with other luxury offerings. I’d like to see us continue to improve on some J.D. Power numbers as they relate to customer service and quality.

WardsAuto: Is all the hype surrounding electrified vehicles justified or will they remain niche products?

Speck: Electrification is one of the key answers to our energy challenges. Sales growth of electric cars will be slow because we must remember that the infrastructure to support those cars has to grow and costs must come down as efficiencies of scale are realized. However, they will become increasingly common cars on our roads.

WardsAuto: Has Volvo been positively or negatively impacted following the sale to Geely? Why?

Speck: Our new ownership has had a very positive effect on our business. Our shareholders understand Volvo's global-brand positioning. Our chairman, Li Shufu, has said on numerous occasions that he doesn't want to change Volvo; he wants to help us expand our global presence.

In particular, our new owner has helped us develop a credible plan for significant growth in China, which will broaden and strengthen our financial performance.

[email protected]