Volvo’s U.S. Chief Forecast Sales Gain in 2012

A new finance company, more fuel-efficient engines and an accent on performance and styling are among strategies the auto maker will use to grow demand.

Herb Shuldiner 1, Correspondent

April 25, 2012

2 Min Read
A onetime bestseller XC90 sales have diminished making replacement high priority for the brandrsquos North American chief
A one-time bestseller, XC90 sales have diminished, making replacement high priority for the brand’s North American chief.

NEW YORK – Riding a streak of 15 consecutive months of sales increases, Volvo Cars of North America is forecasting an overall 9% gain to 73,000 vehicles in 2012.

VCNA sales rose 6% in first-quarter 2012, after the auto maker posted its best March in four years with 2,599 units.

Volvo's record year in the U.S. was 2004 when the Swedish importer delivered 137,067 units, but VCNA CEO and President John Maloney doesn’t see volume returning to record levels any time soon.

Maloney says Volvo’s traditional brand image of safety now is being augmented by vehicle styling and performance that is helping to draw new buyers.

“We're trying to add design and driving dynamics as high considerations,” Maloney tells WardsAuto. About 60% of S60 sales are conquests, with about a third of those buyers having come from other luxury brands.

Volvo is winding up a dealer consolidation that took its count to 315, from 360 a few years ago. The majority of the franchisees are profitable. Maloney says.

The Volvo 5-year, 60,000-mile (97,000-km) free-maintenance plan that was instituted in June 2009 is helping dealers, he adds. The auto maker also has allowed some formerly exclusive Volvo dealers to take on additional brands in recent years, because of diminished volume.

The XC90 cross/utility vehicle, which was a big seller during Volvo's record year, now accounts for only 15% of overall demand in the U.S. Getting a new-generation XC90 is one of Maloney’s high priorities. But that won't be available in North America until the end of 2014, he says. When it does arrive, it will feature more fuel-efficient engines than the current model.

Volvo plans to employ a new generation of 4-cyl. engines in all of its vehicles to increase overall fuel economy. “We're the only luxury brand that has decided to use 4-cyl. engines exclusively,” the executive says.

The auto maker is in the process of setting up a new captive finance company, which should be up and running by the end of the year, Maloney says. That will help retain leasing customers and provide new floor-plan options for Volvo dealers.

“We've been out of the capital business since before the breakup with Ford,” he says, noting the new finance company will fill a big void for the company.

Ultimately, Volvo is targeting a global volume of 800,000 units by 2020. It sold 450,000 units worldwide last year.

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