After record profits and sales last year, Volvo Cars is rebooting its financial and operational ambitions, including dropping out of traditional events such as the prominent Geneva Auto Show.
It’s part of a plan to make the premium automaker a leading player in the global automotive business by the middle of the next decade.
Volvo Cars, owned since 2010 by Chinese conglomerate Geely Holdings, says it expects to generate half of all sales from all-electric cars, one-third of all cars sold to be autonomous and half of all cars it offers to customers through its subscription service.
President and CEO Hakan Samuelsson (pictured lower right) says Volvo Cars aims to transform its connection to customers, building more than 5 million direct consumer relationships by the mid-2020s, creating new sources of recurring revenue.
He says this also will create far greater potential for the company to develop connected and other services for customers.
“Our customers’ expectations are changing rapidly,” Samuelsson says in a statement. “This means that Volvo Cars is also changing rapidly. These initiatives will help transform Volvo from being purely a car company to being a direct consumer services provider.”
The company also wants to generate premium-level profitability in line with other premium automakers, driven by increased sales and revenues across all three global sales regions, and a broader range of cars including sales to the new segment of autonomous ride-hailing companies.
Volvo Cars sees its improved financial performance increasingly driven by industrial synergies generated with affiliated partner companies.
It expects to benefit from lower procurement costs, shared development costs and economies of scale alongside Polestar, its premium performance EV brand, and its 30% holding in the new Lynk global car brand.
The automaker also will move away from traditional auto-industry events to focus on bespoke activities to introduce its new cars, technologies and services to media and consumers.
In Detroit, the automaker last had a full exhibit on the floor of the North American International Auto Show in 2017. For this year’s show in January, Detroit area Volvo dealers displayed a handful of vehicles in the concourse outside the main hall at Cobo Center.
As part of the company’s strategy to target a new mix of audiences and develop its own events, Volvo Cars will not attend the Geneva Motor Show in 2019.
Björn Annwall, vice president-strategy, brand and retail, says the shift toward purpose-specific communications supports the company’s intent to transform its connection to its customer base.
Volvo Cars’ most recent new-car launches revealed the XC40 compact SUV at the 2017 Milan Fashion Week and the new V60 premium midsize wagon in the driveway of a suburban Stockholm home.
“The ongoing change in the car industry is creating new audiences for Volvo Cars and new ways of bringing products to the market,” Annwall says.
“Automatic attendance at traditional industry events is no longer viable – we must tailor our communications based on how the options complement our messaging, timing and the nature of the technology we are presenting.”
Annwall says the company is not saying never again to car shows. “We expect industry events like the Geneva Motor Show to continue evolving and we may return in the future.”
Volvo Cars last year posted its fourth straight year of record sales, up 7.0% to 571,577 units.