Volvo moving upscale to boost profits

May 19, 2014
China-based Volvo parent company Geely has announced the Swedish automaker will move up a notch on the market in order to go head-to-head against well-known players like Mercedes-Benz, BMW and Audi.

“We will make Volvo cars more luxurious and high-end. Volvo will strive to become one of the dominant players in the luxury car sector,” affirmed company chairman Li Shufu during a press conference held in China.

Shufu did not reveal details about Volvo’s future product plans but he has previously indicated the automaker will develop a large, range-topping luxury sedan aimed at the BMW 7-Series and the Mercedes-Benz S-Class. Tentatively called S100, the flagship will ride on a lengthened version of the modular Scalable Platform Architecture (SPA) that will underpin the next S80 and the upcoming second-gen XC90.

The S100 is expected to enter production in Volvo’s Chengdu, China, plant in the next couple of years. Shufu has not commented on whether the sedan will be exported to other markets such as Europe and the United States.

In addition to boosting profits, moving Volvo up a notch on the market will make it possible for parent company Geely to sell a full lineup of aggressively-priced mainstream models built with technology gleaned from the Swedish automaker’s R&D department.

“Geely and Volvo are like brothers, not father and son,” explained Shufu, adding that he would like the two companies to operate like Volkswagen and Audi.

Volvo is hoping the popular V40 hatchback will help it sell 80,000 cars in China this year, an ambitious goal that would make China its largest global market. Last year, the automaker sold approximately 61,146 cars in China (up 45.6 percent from 2012) and 61,233 cars in the United States (down 10.1 percent from a year earlier).

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