In case you have not observed, Volvo is again. Over the previous few years, the Gothenburg-based automaker has made a surprising restoration from the jaws of monetary and return to prominence because the main purveyor of secure, refined, and undeniably Swedish automobiles.
Underneath the steerage of father or mother firm Geely Holdings, Volvo has unleashed an all-new era of fashions constructed round is state-of-the-art Scalable Product Structure (SPA) platform and Drive-E four-cylinder engines.
Chief amongst that is the game-changing second era Volvo XC90 SUV that swept the 2015 award season – together with Enterprise Insider’s Automobile of the Yr.
Main the cost on this facet of the pond is Volvo Automobiles of America CEO Lex Kerssemakers. The veteran auto government sat down with Enterprise Insider on the 2017 New York Worldwide Auto Present. Our dialog touched on varied matters together with the state of the US auto market, the corporate’s new South Carolina manufacturing unit, and Volvo’s plan for autonomous driving.
On the state of the US auto market:
In 2016, automakers offered a file 17.6 million automobiles within the US. However, to this point in 2017, the auto market has struggled to maintain up with final 12 months’s torrid tempo. Whereas Kerssemakers sees growing issue in attempting stay as much as 2016, he nonetheless believes within the energy of the US market.
“The strain is unquestionably growing and the extent of incentive spending is up,” Kerssemakers stated. “However we’re nonetheless speaking about (promoting) 16 million to 17 million automobiles. It is nonetheless fairly excessive, even when we’re a bit upset that it is down in comparison with final 12 months.”
Additional, he believes Volvo’s comparatively small market share, when in comparison with Detroit’s Massive Three, dulls a lot of the consequences of most gross sales fluctuations.
“To be trustworthy, as a model with 0.5% to 0.6% market share, I am not trying on a regular basis on the improvement of the general US market in the identical method as manufacturers with larger gross sales quantity just like the Massive 3,” the Volvo boss stated. “I feel it might fluctuate quite a bit earlier than a model like Volvo is affected.”
On being a US and a world producer:One of many tenets of the Trump Administration has been the bolstering of US manufacturing. For Volvo, the centerpiece of the US manufacturing plan is a brand new USD 500 million manufacturing unit in South Carolina that’s anticipated to enter service within the third quarter of 2018.
“We determined two years in the past to (manufacture) in the US as a result of we needed to offer a transparent sign to our retailers, who’ve been our loyal companions, and to our clients that we’re right here to remain,” the affable Dutchman stated. “In 2007 and 2008, articles popped up of individuals saying that Volvo goes to depart the US market and that is completely not true. So the most effective proof of that’s to place a manufacturing unit on American soil, which we did.”
Now with vegetation in Europe, China, and US, Volvo has home manufacturing services within the three most vital markets on the planet. In accordance with Kerssemakers, native manufacturing brings Volvo nearer to its shoppers and shields the corporate from fluctuations within the international currencies.
The brand new manufacturing unit, anticipated to have the flexibility churn out 100,000 automobiles a 12 months, will produce the corporate’s subsequent era S60 sedan for home consumption and export.
On Chinese language-made Volvos:
In 2015, Volvo made waves by importing its long-wheel-base S60L Inscription sedan – changing into the primary main model to promote Chinese language-made automobiles within the US. The S60L was initially developed for China’s chauffeur’s tradition, however the automobile made its debut within the US because the luxury-spec Inscription mannequin.
“We determined to import it two years in the past and now it is 70% of our S60 gross sales within the US as a result of, just like the Chinese language, People like area as effectively,” he instructed us. “It is a win-win as a result of the retailers like it and so the purchasers.”
In accordance with Kerssemakers, the success of the S60L is consultant of the benefits of having a world manufacturing footprint that enables the corporate higher flexibility to tailor its product choices primarily based on regional wants.
Whereas it is turn out to be a hit, there are nonetheless lingering considerations among the many public and the media about China’s skill to provide automobiles which can be on par with their Swedish counterparts.
“To be trustworthy, there is not any (distinction in high quality) in any respect,” the Volvo chief government stated. “It is completely a none situation. It is purely between the ears.”
The truth is, when the primary S60s got here in from China, the corporate’s sellers went by the automobile with a positive tooth comb in search of high quality points and did not discover something, Kerssemakers stated.
“We’ve a world manufacturing course of that features Swedish engineers who go to China, prepare all people there and see that every part is operating in keeping with Volvo requirements,” Kerssemakers instructed us. “No matter the place it is produced, it is the identical high quality.”
On the way forward for Volvo tech:
By committing to small-displacement, four-cylinder turbo engines and electrification in 2008, Volvo made the daring determination to push the model in direction of the course of superior expertise and environmental friendliness quite than conventional luxurious.
Now it is working in direction of the following frontier, autonomous driving.
One in every of Volvo’s companions within the improvement of subsequent era autonomous expertise is Uber. Nevertheless, the controversial tech agency’s efforts have been beset by improvement points together with the crash of an autonomous XC90 check automobile in Arizona.
Nevertheless, Volvo shouldn’t be wavering in its help of Uber’s autonomous driving program.
“Accidents do occur, however we consider within the partnership with Uber and we’re absolutely assured that it’s going to proceed to be fruitful,” Kerssemakers stated.
Nevertheless, the Volvo CEO cautioned that the general public and the auto business ought to be cautious within the tempo of growing autonomous tech improvement.
“There’s numerous discuss autonomous drive, however there are numerous methods on the market that aren’t autonomous drive. They’re pilot help methods,” he stated. “We ought to be very cautious that we do not begin to consider we’re there already.”
The truth is, Kerssemakers instructed us that true stage 4 or stage 5 autonomy will not be prepared till effectively into the following decade.
“Each firm, each model is driving tens of millions of check miles with autonomous automobiles. So we’re nonetheless in a check section,” he stated.
However, even with Volvo’s new tilt in direction of excessive tech, the model stands for one factor above all else and that is security. Because of this, for Kerssemakers, success within the quest for autonomous driving would not essentially imply being first within the market, quite it is about being the most secure and most dependable.
“This isn’t a dash we wish to win and be the primary, it isn’t about that. We wish to be main, however main means excessive tech that is dependable and secure,” he stated. “For Volvo, it is a marathon, not a dash.”
