V40 models help drive Volvo growth as brand ramps up for new XC90
Speaking to International Fleet World, Mr Visser said that for Q1, fleet volumes are up about 22% quarter over quarter for deliveries, adding that: ‘Also our total sales (which may include vehicles that haven’t been delivered yet) is up 29% and that for us, very much when you look at it model by model, shows that the “model year 14” models are really taking up and being accepted into the fleet market, particularly the 40 Series into the fleet market, both the V40 and the V40 Cross Country. So there is very much an upward trend from our point of view, which goes way beyond the positive industry trends.’
With the brand having seen strong demand in China last year – sales of Volvo cars there rose 46% in 2013, combating declines in the US to lift the company's overall sales – Mr Visser said that the country remains a target market for growth.
He commented: ‘Yes, we’re in fact growing pretty significantly in China with over 40% sales growth last year, so our volume is growing way beyond the size of the market place. But the fleet market in China is still very small, and is not at all comparable with Europe or even any of the European markets, so our volumes are very much driven by private sales, which is pretty much the entire market in China.’
Mr Visser also talked about Volvo’s commitment to growing sales in America this year following the dip in 2013, saying: ‘We have a new team in place, and we are offering new product in the US that we are launching as we speak. We currently sell approx 60,000 vehicles in the USA, but there could be scope to sell 100,000+ cars. The XC90 is going to be a keystone of that, and we have improved our leasing offers. The leasing market in the US is extremely important, around 45-50%, and we are now increasing in the leasing market. So it isn’t a silver bullet for growth in the US, it is quite tactical – the leasing, the offers, the new team and the product range will all be important. We are also investing more on targeted marketing. We think it will take some time to grow in the US and it will take time to change it, so we want to stabilise the market in 2014 and then really start growing in 2015.’
He added: ‘We also have other big markets where we’d like to see some progress – we’d like to grow in Germany where we have placed a new team and a new strategy, and also in the UK where we have clearly already made good progress. The V40 is very well accepted in the UK and we are slightly growing there so it is an important market for development. From a market point of view, it is predominately China–US focused, from a product point of view it is XC60, S60 and looking at opportunities for V40.’
Mr Visser also talked about the 2015 XC90 – which the brand started to reveal earlier this week – and where it sits in the model line-up, saying: ‘For us, it is our flagship – our premium car. It is replacing an iconic car so there is a lot of expectation. When we launched that car it redefined the segment and we want to do that again, so we have extremely high hopes. We are almost seeing it as a re-launch of the Volvo brand, which it will be in a lot of the markets, so we are pretty ambitious about it, and we think the car both from a design and a quality and innovation point of view sets quite a new standard.’
And as already announced, the new XC90 will also be Volvo’s first car with autonomous steering to avoid accidents as the brand looks to gain leadership in the field of autonomous driving.
Commenting on the reasons behind Volvo’s focus on this area, Mr Visser said: ‘According to our data, 30% of city traffic in Europe is people looking for a parking space, and people spend up to six hours a week in traffic jams. That is not what you can define as the “pleasure of driving”, which also for us is so important as a brand. So if these unpleasant moments of driving can be eliminated by Volvo in a consumer-friendly way, and obviously as we believe that it can fit with our safety focus, it becomes a very strategic tool.
‘For us it is a very strategic element that we are working on, and you will see far more in communications when we bring in the first phase with the XC90, but we believe that we will have concept cars with full autonomous driving in the marketplace by 2017 and that by 2019, we will have a fully commercialised product.’