Published on July 18th, 2011 | by Daniel Sherman Fernandez0
Volvo moves beyond safety image as Geely seeks Volkswagen drivers
Swedish carmaker Volvo wants to expand beyond consumers in China, who is considering trading in a Golf for a bigger, safer model from the Chinese-owned Swedish brand. Volvo, which built a reputation around security and reliability, aims to broaden its appeal, especially with Chinese consumers, by adding user-friendly comforts and a touch of luxury. The goal is to more than double sales to 800,000 vehicles and challenge German premium leaders Volkswagen, Audi and Mercedes-Benz. The shift in image was instigated by CEO Stefan Jacoby. The former VW executive was brought in by Zhejiang Geely Holding Group Co. after purchasing Volvo from Ford last August for around $1.5 billion. The 53-year-old executive determined that safety advancements throughout the auto industry meant Volvo’s reputation was a diminishing asset.
China “is going to be our largest single market in the world,” Doug Speck, Volvo’s sales and marketing chief, said in an interview. “It’ll be where we grow our volume more than any other market, and it’s where we’ll have significant infrastructure. We’re establishing China as a second home market.” The carmaker, whose models include the four-door S60 sports sedan and C70 convertible, increased sales by about 24 percent to 44,700 cars last month, marking the best June in its 84-year history. The company should “comfortably” deliver at least 425,000 cars this year, up 14 percent from 2010, Speck said. The figure is still shy of its 2007 record of 458,323, as Volkswagen, Audi and Mercedes target new sales marks this year. Volvo may also continue to lag behind its German competitors. Audi is projected to grow sales by 400,000 and Mercedes by 490,000 in that period.