Volvo for now

Ownership issues aside, Volvo is committed to new products. But the Swedish company says it would prefer to stay in the Ford fold.

Visiting Australia recently, President of Volvo Car Overseas Corporation Lex Kerssemakers (pictured), spoke with the Carsales Network on a range of subjects. Chiefly, he confirmed the carmaker was pushing ahead with its new XC60 and S60 next year and continuing development of seven-seater options, but also reinforced the Swedish brand's view of the productive partnership it has shared with Ford for some years.

In light of this week's announcement of the formalisation of Geely's takeover interest in the Swedish marque, here's an overview of the Netherlands-born long-time Volvo exec's vision of the future, short and long term..

ON OWNERSHIP
Asked if the company's development will further rely on Ford components and platforms, Kerssemakers admitted: "We are at a pivot point with what to do... We can go in either direction."

Kerssemakers wouldn't be drawn on the alternative "direction" -- whether Volvo would remain using Ford components, or another brand's, or even going solo.

"We are exploring," he teased.

At this stage the issue of sourcing platforms and components is not high in Volvo's priority list, he says. Models such as the V70 and XC60, which use a derivative of Ford's EUCD platform, were recently introduced and Volvo sees more life using the same underpinnings.

ON DIRECTION
Kerssemakers said the company is prioritising the successor to the large XC90 SUV.  SUVs will play an important part in Volvo's future lineups, he says. And they'll stay 'real' SUVs but not expand too much from the current vehicles' dimensions.

"What we absolutely want to continue with is the seven-seater role," he declared.

However the accommodation will have to fit in the XC90's current 4.8m or even potentially smaller layout.

"When we developed the XC90 we made three or four attempts because we wanted to squeeze seven seats in a 4-metre 80-ish car. We want to make compact cars. We want to make them more efficient on the inside, and further shrink the size. We sincerely believe the world is not interested in all these big cars."

What the rest of the world wants is increasingly important, as Volvo is making more money in emerging markets. The Swedish brand opened in Russia several years ago but in the last three years Volvo has been making good headway in that market.

"We went in record time from 5000 units and were heading to 30,000 units before the financial crisis started. We were elected -- three years in a row -- as the [best] premium brand," Kerssemakers stated.

ON IMAGE
Here, it's much different. Some Australian drivers like to think there's such a thing as a 'bloody Volvo driver' and the company's most recent marketing campaign attempted mockery of the image to highlight Volvo's talents in handling and safety.

"We see the same thing in the UK. Many English customers say they see the 50-year-old man and his family driving in a 240 far too slow," Kerssemakers conceded.

But Volvo is also pleased its cars, like the long-running 240 wagon, are family favourites and believes its new product roll-out -- and new markets -- will overturn brand image concerns.

"The quality of those cars is so good, they're still driving around. On one side that's extremely positive because the 240 is an icon for the brand, but it also has a negative "bloody Volvo driver" perception.

"Whereas in the countries where we have [introduced] our current program, there's a totally different image. Because we don't have that 'luggage' with us. It's a much more dynamic image."

ON SAFETY
Volvo's new image might be more dynamic but it still focuses on safety -- the best-known element the brand projects.

"It's still a very safe image. We don't want to lose that," says Kerssemakers.

"We have to clarify: Do we still stand for what we have before? We have visualised it as a [brand] pyramid, where you have a base that you need to fulfil and [at top] where you want to make the difference.

"Given our heritage, we want to make the difference in safety. That will be tough, because everyone is on to safety and the EuroNCAP is really putting a lot of inflation on the stars."

Features like the City Safety feature applied to the XC60 are evidence of where Volvo is making a difference in safety developments, he said.

"That makes us leaders," said Kerssemakers.

"Safety is now much more 'cooler' than in the past. We want to stick to our heritage and further develop it but make it a little more sexy."

ON SEXY
"The XC90 was a big turnaround point, and so was C30... Especially with the C30," said Kerssemakers in reference to Volvo's styling direction.

In its segment ($40K-plus small passenger) the C30 three-door hatch is up against the likes of BMW's 1 Series, MINI Cooper and Audi A3 -- all popular for their entry level prestige association, albeit in the form of a small car city runabout. We like the C30 and would make it our pick of the bunch even if it's well due for an update...

"We are on the journey to become more premium. If you see what's happening in the marketplace, everybody is moving up," asserts Kerssemakers.

"There is a stream of cars coming [from] the Koreans, the Chinese, [and] the Indians which will take a big part of the volume market. Everyone's moving on and we want to move on also.

"When we developed the C30 we wanted it to be absolutely on par with the premium competitors. We spent a lot of money to be able to beat our competitors."

ON S60, C30 and S40
According to Kerssemakers, his company knows the same investment devoted to the C30 will be required of the new S60.

"You must ask money for that otherwise you don't have a sustainable business," he said.

As for C30, Kerssemakers wouldn't divulge whether Volvo had plans for an upcoming five-door version.

"We knew when we entered the C30 as a three-door its marketplace was limited. It's [just] 25 per cent of that segment. We evaluated whether we should offer it as a five-door and that would've been -- business wise -- the more clever choice. However, we were new in that part of the market. We needed to be very extreme to be successful, otherwise nobody's watching you.

"If we'd introduced that car as a five-door we would have diluted the design language and design language makes the difference."

The current C30 closely follows the original Volvo SCC concept shown at the Detroit motor show in 2001. But is Volvo going to follow the same design plan for the second-generation C30?

"Probably not," said Kerssemakers. "We haven't made up our mind yet."

The Volvo marketing boss admitted to the Carsales Network that the S40 replacement had been delayed, but characterised this as appropriate use of resource. He said designers would instead concentrate on updating the current lineup and would approach S40 again when the company was better resourced, hinting that it would be until Volvo's sale had been approved.

At time of publish Chinese manufacturer Geely is first in line to take over the Swedish brand.

ON FOMOCO
In terms of Volvo's offerings as a manufacturer under a more stable shareholder than the Ford Motor Company, Kerssemakers said the company had ongoing production support from its American parent.

"We still have Ford. We still have their platforms. You'd have to agree that our platform for the S40 and C30 -- a similar platform used for the Focus -- is not a bad platform, given the driving dynamics it delivers. So we're pretty happy."

Kerssemakers wasn't able to confirm whether Volvo's new owner would have access to the platform, called 'P1' by Volvo. Although belonging to Ford, Volvo has refined the underpinnings to suit its particular uses.

"We have a standalone R&D [research and development] department," he said. "And we make use of elements from Ford.

"That's one of the strengths of Ford; that they realise if Volvo is on a journey to becoming a premium brand and if you don't want to make a volume brand out of it, you need a very specialised focus. So we have totally independent R and D. As we have with manufacturing: We share manufacturing with Ford only in China."

That is, for the S40 and a long-wheelbase S80 built to suit China's market.

Volvo "absolutely" intends using Ford engines according to Kerssemakers, just as Ford is using Volvo's five-cylinder engines in the Focus RS. The happy union is best seen locally in one of Ford's 'hero' models, the XR5.

"We are very good partners and we continue to sell engines. You see it all over the place... BMW is buying engines from PSA. That is how it will work in the future," suggests Kerssemakers.

"Ten years ago people were very paranoid about using each others platforms. But in the future we'll continue to share; that will increase."

ON DESIGN, ENVIRONMENT
Kerssemakers believes there are two other areas Volvo can develop as unique selling points, namely its individual Scandinavian design and eco-oriented efforts.

"We want to show the world what 'the typical Volvo' is. Both interior and exterior [wise]. And then we have the environment, and Volvo is well-known for what we have been doing in the past on the environmental side. We have clearly elected that is where we stand."

ON SALE
Commenting on the brand's business prospects in light of Ford's announcement to sell, Kerssemakers commented: "It's all in the hands of management at [Ford HQ] Dearborn. Even Stephen Odell [Volvo Cars President and CEO] has elected not to be involved with the decision making process.

"Because we need to sell cars. We have faced a global [financial] crisis and we need to get cars out. So we tell everybody: 'yes, there are things ongoing...' Everybody can read it in the press. But we need to focus on the business."

Kerssemakers denied Volvo's production budget had been compromised by the ongoing ownership issues.

"If there have been reductions [in budget] it's been driven by the global financial situation, rather than the fact Ford has decided to sell it [Volvo].

"You can't sell an empty shell. No one's going to spend money on it if it doesn't have a future. The cycle plan has continuously been developed, for the reason that if there's no plan, no development, no one's going to buy this company... You can't stop this [R&D] or you won't have a future."

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