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NEWS
No more price cuts!
Volvo resists discount temptation as it seeks to build brandLast week's S60 Polestar's price cut will not be emulated in other parts of the Volvo range despite the company admitting overall sales so far this year are about 10 per cent below expectations.
Instead, important models such as the V40 small car, which is down 13.2 per cent year-on-year according to VFACTS figures, will be boosted with special editions and added equipment to improve their value proposition.
Volvo Car Australia is also looking for an increase in the sales number of its SUV staple, the XC60, which is running slightly behind its 2013 rate.
"We are a little bit disappointed," admitted Volvo Car Australia managing director Matt Braid. "We expected to be performing about 10 per cent better than we are."
The brightest light in the Volvo lineup is the S60 range, which is up 62.5 per cent in 2014 compared to 2013, with much of that spike driven by the successful debut of Volvo Polestar Racing in V8 Supercars and the high-profile promotion that has backed it up.
Other positives include the V40 Cross Country (pictured), which is a new model line, while the V60 and XC70 are ahead of their 2013 rate. The ancient XC90 is only down 20 per cent despite being in its 11th year on-sale and publicity about its successor gathering steam.
Overall, to the end of April, Volvo had sold 1611 vehicles in Australia, down 0.4 per cent on the same period in 2013, when 1618 had departed dealerships.
There has been debate about the V40 five-door hatch's pricing and positioning as a direct competitor for the Mercedes-Benz A-class, BMW 1 Series and Audi A3 since before its launch.
But Braid insists price-cutting and the effects that would have on brand image and resale aren't the answer.
"I think the car is very well specced and priced against the competition. But we are not stupid, it is a very competitive segment, it is the new battleground of the high-end European marques and we want to be part of that.
"We won't see a price reposition on that car, but we are looking at various offers month in and month out – as every manufacturer does – to make sure it remains competitive in the marketplace.
"That's generally our preference as the way to go. As a luxury brand we don't think the brand warrants price reductions... we are building this brand in this market to be at a level it is in other markets both from perception and respect and including things like resale and so forth."
Braid said some of the slow down in XC60 especially could be attributed to the roll-out of the new four-cylinder Drive-E four-cylinder engines, but the sales decrease could mostly be traced to issues closer to home.
"It's very competitive so you have to come out of the gate in January with the best ammunition you can fire at the market and there were a couple of things we probably missed to be honest.
"I won't go into exactly what they are but we needed to sharpen up our game in some things, which I think we have now.
"It more is the game is moving month in and month out and you have to move and adapt and swivel, turn and shoot as quickly as you can."
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Written byBruce Newton
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