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Steady as she goes for Volvo in Australia

Sales blip: Volvo V40 sales took a hit in September, with local MD Matt Braid blaming changes to the FBT and the election.

Volvo sales down but local chief pushes for sustained growth in Australia

Volvo logo21 Oct 2013

VOLVO’S local chief says a refreshed line-up and a more stable post-election climate will ensure sustained growth for the company in Australia, but says it won’t chase “stupid growth numbers” next year.

The Geely-owned Swedish marque has sold 3885 passenger vehicles locally to the end of September, down 9.0 per cent on the same period last year when it had sold 4269 units.

Sales of all current models in the Volvo line-up are down, including the C70 coupe convertible (-39 per cent), the S60 sedan (-15 per cent), V60 wagon (-3 per cent) and S80 luxury sedan (-61 per cent), while the XC60 compact SUV is also down (-21 per cent) as is the XC90 (-31 per cent).

The overall figures are slightly skewed as the Federal Chamber of Automotive Industries sales data still lists the C30 hatch and the S40/V50 small sedan and wagon that Volvo discontinued earlier this year.

Speaking to GoAuto at the launch of the facelifted S60/V60 range last week, Volvo Car Australia managing director Matt Braid identified an aging model line-up as one of a number of reasons for the sales slump.

“We are in a product renewal phase so S60, V60 and XC60, given that’s been our strongest seller for four to five years, that’s being renewed,” he said. “There is a natural lifecycle drift on volume at the end there for that car, but that will pick up from this point on with the new car coming.”

Traditionally a strong seller for the brand, the ten-year old XC90 family-sized SUV is sliding in the face of strong-selling competition such as the BMW X5 that is scheduled for replacement next month, the Mercedes-Benz ML-Class and the Lexus RX.

Mr Braid said the replacement is still some way off, but believes it can remain a viable alternative in the market until then.

 center imageLeft: Volvo Car Australia managing director Matt Braid.

“With XC90 we have to keep going for at least another 12 to 18 months. Its 10-plus years old, it’s still going very well for its age and it’s finding homes and still finding love amongst families as a seven-seat family SUV. We have just got to try and maximise the end of life phase for that car as much as possible.” Volvo previewed its future design language with the striking Concept Coupe at last month’s Frankfurt motor show, while the company’s design chief Thomas Ingenlath hinted at the look of the next-generation XC90 via a series of sketches at a product presentation.

Mr Braid said a release date for the second-gen XC90 was yet to be finalised, but he expected it to go on sale locally in 2015, with the first full year of sales in 2016.

The refreshed XC60 arrives in showrooms later this month and the facelifted S80 sedan should also launch locally by the end of the year.

The V40 hatch range that launched in February this year started off strongly, averaging around 100 sales per month, but Volvo only managed to shift 66 units in September.

Describing it as a “blip”, Mr Braid said factors such as the Rudd government’s proposed changes to the Fringe Benefits Tax (FBT) and the election announcement temporarily impacted sales of the A-Class competitor.

“When we get sales momentum, our brand tracks really well. When we take a hit, it takes us a long time to build our profile back up again. Particularly with the FBT and the subsequent election announcement, that knocked us around because we were flying.

“We came out of first quarter pretty soft, into the second quarter going pretty strong and finished June in a really good position. The announcement came out in July about FBT and the market started to cool. And when there is doubt, we just suffer maybe more than the next guy. We are just trying to build back up and everyone has come out of the election has built up quicker and we are sort of slowly coming out behind it,” he said.

Despite the slow-down, Mr Braid said he expects to sell between 5000-5500 passenger cars in Australia this year, which would sit in the vicinity of last year’s tally of 5375 units.

“If we could do that (5000-5500) we would be happy, because given the challenges we have had and the way the market is going, that is probably our ideal finishing point.”

While sales target are yet to be set for next year, Mr Braid said he was reluctant to make wild predictions, preferring instead to focus on sustained growth in Australia.

“We haven’t really discussed them (targets), but we are not after any stupid growth numbers. We are not going to stake our claim and say ‘it’s going to be 10,000 in the next couple of years.’ As long as we can see steady, profitable growth for the company and getting our cars competitive in their respective segments, we will be happy with that.”“We want to keep moving forward but we are not going to make ridiculous predictions. We know what we have to do,” he said.

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