Volvo's 100,000-Unit Goal Needed for Dealer Network, CEO Says

Volvo’s medium-term goal of selling 100,000 units annually in the U.S. is aimed in part at ensuring the profitability of its retailers, says the automaker’s CEO.

“The dealer network really requires a volume of 100,000, and we’ve been there before,” Hakan Samuelsson tells WardsAuto. “That must be our absolute target to come back.”

The Swedish brand has a long way to go. Last year, U.S. deliveries totaled 61,233, according to WardsAuto data. The last time the automaker eclipsed the 100,000-unit mark was 2007, when it sold 106,213 units.  

“I think the dealers expect that, and I think the dealer network requires that volume to be profitable,” the executive says, adding he hopes to achieve the sales by 2016. “It will require new products and will take some years, but that is where we have to be.”

Samuelsson says shorter-term goals including posting a profit, which the automaker did last year. Flush with an $11 billion investment from Chinese owner Geely, Volvo plans on launching a slew of new products in the coming year, beginning with the recently unveiled refreshed S60 sports sedan, XC60 CUV and V60 wagon.

The automaker also has made considerable investment in its new Drive-E powertrain family. Composed entirely of 4-cyl. models, the Drive-E lineup will include forced-induction engines and electrified powertrains.

Perhaps the most important new model for Volvo is the upcoming XC90 fullsize CUV, due in the fourth quarter. Launched in 2003 the XC90 quickly became Volvo’s best-selling vehicle, but lack of any substantial updating has led to stagnating sales.

“We need a stronger SUV, and the XC90 is very important step for us,” Samuelsson says.

Other new products on the horizon include a replacement for the S80 fullsize sedan, expected to be called the S90, and a new V70 wagon.

Samuelsson says the S90 will be more luxurious than the outgoing model and likely will be priced higher as well. It will not have a V-8 engine, however, as that goes against Volvo’s environmental philosophy.

Also on the radar is the U.S. introduction of the V40 small car, which has been a hit in Europe and Asia-Pacific.

The car is needed in Volvo’s U.S. lineup, as more and more luxury competitors have begun to offer entry-level products, Samuelsson says. However, the car is unlikely to make it to U.S. shores until the next-generation model is launched.

“We need that car in the U.S., but it takes some development to bring it in safety-wise,” he says.

On a global basis, Samuelsson sees good times ahead for Volvo, noting the brand’s increasing popularity in China and expected upticks in the U.S. and European markets.

“There’s a combination of good signs in many markets,” he says. “With our new management team we have much better communication and we’re a better-structured brand.”

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