No Chinese Volvos for Oz

Volvo appears to be on track for a return to profitability this year. Global sales for the Swedish manufacturer were up 28 per cent, year on year, based on figures for February 2010.

In the US, its largest market, February was the company's ninth straight month of year-on-year sales increases -- admittedly, against a backdrop of poor sales in 2008.

For Volvo in Australia, the forecast for this year is also looking sunny. 2009 was a solid year for sales, with the company's tally (4668 units) increasing 4.5 per cent over the score for 2008 -- in a market that showed an overall downturn of 7.4 per cent for the year.

In coming months Volvo will introduce its new S60 and the company holds out high hopes for that car, which is expected to provide stronger competition for German prestige rivals and Lexus. Indeed, the company's management has fingers crossed for a 5000-unit sales performance this year. That would represent an increase in sales of roughly seven per cent from 2009, which might be achievable with the new S60 in the range.

Volvo appears to be sitting pretty, despite the news that it is to be sold by its current owner, Ford, to Chinese manufacturer, Zhejiang Geely Holdings Group ('Geely'). The sale, reported by the Carsales Network yesterday, will result in Volvo changing hands officially with effect from the third quarter of this year -- for US $1.8 billion.

How will the transfer of ownership impact on the local operation, we asked Volvo's Australian MD, Alan Desselss. 'Hardly at all' would be a good way to summarise it. Firstly, he explained, the company has striven to maintain staff morale across all strata during the sale process.

"We've tried to make sure that all of our staff -- both international and obviously locally here, as well as our dealers -- have been kept abreast of the progress as it's happened," he explained.

"So I don't think that there were any surprises for them. And again, as Zhejiang Geely Holding Group have put out, it's business as usual. Clearly they need our dealer network to maintain the focus and maintain the Volvo brand going forward, right around the world. As I said: 'Business as usual'."

There are no immediate changes to the modus operandi for Volvo in Australia and the line of communication still runs directly from the importer's head office in Sydney to the parent's head office in Gothenburg, Sweden. Desselss is upbeat about the state of play for the importer in Australia during 2010.

"I think it's looking very, very good," he said. "We're very happy with the way things are moving here. We've certainly seen it grow year on year -- 2009 on 2008. One of few luxury car brands that have done that in Australia and we're very proud of that. We anticipate we'll see even further growth this year."

Desselss principally attributes the company's effective rebirth in Australia to consistently improving product and he expects that to continue this year.

"Certainly product: XC60, C30, C70... good product coming through and allowing us to get that growth. I think that will be the case for this year as well."

Desselss also says Volvo dealers have weathered the GFC well in a market that was shaping up poorly during the early months of 2009.

"Extremely well. If there have been any changes, it's strategic or dealer choice. I can tell you, it's only one dealer we're talking about."

The dealer concerned was based in Wollongong, NSW, and that decision was a "strategic" one.

How could Geely's acquisition of Volvo shape the future for the importer locally, we asked? Could, for example, Chinese-built Volvos be sold here? A long-wheelbase version of the S80 is built at Chongqing in China, but while Desselss argues that the build quality from the Chinese factory is up to the standard set by either of the other two Volvo facilities, that car won't come here.

"I will say... that we're already building S40s and S80 long-wheelbases in China -- Chongqing -- and right now, the quality that's coming out of that factory is equal to, if not better than the quality that would come out of our factories in either Ghent [Belgium] or Gothenburg [Sweden]," he said.

"I don't think that it's really a case of 'made in China' as such, as 'made by Volvo'. Whether it's made in China, Ghent -- or Sweden for that matter -- the quality will be Volvo quality."

But the S80 is a no-go for the local market.

"No, I don't think that we would consider it. At this stage it's all left-hand drive obviously, and for the kinds of volume that we would be seeing here in Australia, it just wouldn't warrant the change across to right-hand drive."

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