Volvo pushes towards 10,000 sales

VOLVO Car Australia managing director Kevin McCann is confident the company will achieve record sales this year and forge ahead to the 10,000-unit mark by the end of the decade as its fully redesigned product line-up and reinvigorated brand strategy take hold.

The prestige Swedish brand is on track to crack 6000 sales this year for the first time since the Australian subsidiary was formed in 1970, which will see it overtake its current record of 5375 units set in 2012.

To the end of September, Volvo has sold 4530 passenger cars and SUVs, representing a 25.2 per cent leap over the first nine months of 2015 – largely on the back of its new-generation XC90 that arrived in August last year.

Speaking with GoAuto at the launch of the all-new S90 large sedan last week, Mr McCann said the company was “on track” to hit 6000 units this year and that the forthcoming new product – particularly the various body styles across the compact ‘40’ and mid-size ‘60’ model lines – would “definitely” help it push past 10,000 by 2020.

“Add the new models in, keep XC90 going strong, S90 is clearly going to do a lot better for us than S80,” he said. “The new XC60 we will see – although the current XC60 has been a very successful car – the new one will take us to a new level.

“And the XC40 is a completely new segment for us and I think from what we have seen of the car so far – and I have seen the same shots you have – it looked fantastic. It has classic Volvo engineering inside it. It is going to be a very well-sought-after car.”

As previously reported, Volvo’s entire product portfolio will be completely refreshed in the coming years, with the recently launched XC90 soon to be the oldest model in its line-up.

Discussing new Volvo factories that have been built in China and in South Carolina in the United States, Mr McCann said the company’s Australian arm would be open to importing models from outside its Swedish home market.

Left: Volvo Car Australia managing director Kevin McCann.

“If there was ever a model that was built in a Chinese factory that suited our market, we wouldn’t baulk at the idea that it is built in China because we know that our global standards are the same,” he said.

“And we know, what’s more important about the car is the way it is developed.

And alongside that, the way the engineering processes to build it are developed as well.”

A number of Volvo’s competitors, including Audi, BMW and Mercedes-Benz, import some of their biggest-selling Australian-spec models from countries including Mexico, South Africa and the US, and Mr McCann believes sourcing is not an issue for consumers.

“People don’t really ask about it,” he said. “Primarily they are buying a brand and they are buying a product that suits them in terms of the way it feels and sounds and behaves.” Mr McCann added that the new batch of product has addressed past criticism that Volvo was not in the same league as the big three Germans, despite pricing its models in line with its rivals.

“The XC90 and every car that follows it now is definitely leading in its class in many of its attributes. And it is not just the technology it’s the sense of fit and finish, design and the innate feeling of luxury you have when you sit in the car,” he said.

“We thoroughly deserve to have the same pricing as our competitors.”

Mr McCann acknowledged that Volvo has finally started to embrace and promote its Swedish heritage and is using it to further build the brand in Australia.

“I think the ultimate advertising tagline now for us is: ‘From Sweden’. We have built an enormous library of imagery around Sweden and the Swedes. I think that is particularly apt for Australia as well because we share a lot of cultural values with Swedes.

“There is a sense of modesty, they downplay things as Australians do.

“There is this love of outdoors. We live in cities but we like to think that we are all great outdoors people. Talk to a Swede about what they do on weekends and it is often like talking to Australians.”

While Volvo has been successful in shedding the conservative, boxy image it has had since the 1970s, Mr McCann said it was still a “huge challenge” to shift brand perception in the Australian market that he described as “conservative”.

“If you are a rechallenging brand then it is even more difficult because they take a long time to shift the memory of how you were before. That’s why we have had to work hard in the last three or four years to change from the ’70s image of the boxy-looking safe car to something that is more attractive and more fun and more enjoyable,” he said.

“It is not something that changes overnight. We watch it quite closely. We have got some pretty clear goals to reach in terms of what we call brand opinion, which is different to brand awareness.

“We have fantastic brand awareness, the same as all of our competitors, but there is a bit of a gap between us and them on brand opinions. We are tracking up on that as we bring more cars in and talk about them more and talk about them in the right channels.”