Volvo Seeks to Protect Title as Safety Leader

Special Coverage

New York Int’l Auto Show

NEW YORK – Volvo Car Corp. isn’t giving up its crown as the auto industry’s safety leader without a fight, President and CEO Frederick Arp says.

Recognizing competitors are seeking to usurp Volvo’s title, the Swedish auto maker plans to heavily invest in new passive-safety systems, Arp says at the New York auto show here.

“We can’t prevent other companies from making (safety) claims,” he says. “We can only stay on course and spend money on (safety). We also have to be very innovative in the active safety area, which is less understood by car buyers than passive safety. We are working on several other safety innovations.”

Of note is Volvo’s City Safety collision-avoidance system, due to be introduced on a Volvo vehicle in 18 months. The system is designed to reduce collisions that occur at speeds of less than 30 mph (48 km/h).

“It is an affordable, excellent system to prevent accidents,” Arp says.

Volvo also is working with Chinese authorities to amass a safety database in that country, he says.

Meanwhile, Volvo is evaluating diesels for the North American market but will take a cautious approach, Arp says, noting about 70% of Volvo’s sales in Central Europe are diesel vehicles.

“We want to be a fast follower when the (demand) starts to be serious,” he says.

The auto maker anticipates sales this year will exceed the 456,000 units sold in 2006, buoyed by increased demand in Europe, Russia and the Asia/Pacific region.

“I don’t expect a lot of help from America, where sales will probably be flat,” Arp says. Volvo has set a sales goal of 600,000 units worldwide by 2009.

Anne Belec, president and CEO of Volvo Cars of North America LLC, says at the show here sales this year will be similar to 2006, as most of Volvo’s new models, such as the C30 hatchback, won’t debut until the fourth quarter.

She estimates the auto maker will sell only 1,000-2,000 units of the C30 in 2007 and predicts the average transaction price for the base model, which starts at $22,700, will be about $25,000. The higher-contented model will average between $27,000-$29,000, Belec says.