New CEO: Volvo is on course
Chinese owners provide stability, resources
John Maloney: More ads
ROCKLEIGH, N.J. -- Under its new Chinese ownership, Volvo has a game plan, U.S. sales are rising and it can afford to run TV commercials, says John Maloney, the new CEO of Volvo Cars U.S.
Maloney, 50, expects Volvo's U.S. sales this year to be "north of 65,000" units, about 25 percent above last year's 53,948. Next year he expects total U.S. light-vehicle sales to rise to 13.5 million units and sees Volvo rising 8 to 10 percent despite no new products other than a mildly freshened XC90 crossover in January.
Volvo's U.S. sales could have grown more in 2011, but supplies of the 3-year-old XC60 mid-sized crossover and the redesigned S60 sedan were tight throughout the year, Maloney said. Volvo is increasing production in Sweden to improve supply in the first quarter of 2012, he said.
The biggest sales gains in 2011 came from the redesigned S60 sedan launched in late 2010, said Maloney. Through November, S60 sales were up about 18,000 units over the prior year to 19,331.
Other key factors:
-- Incentive spending is under $2,000 a vehicle -- lower than the competition and the industry year-to-date average of about $2,500, according to data provided by Volvo.
-- Spending in 2011 will be double 2010's, said Maloney. Most of the money is being spent on national cable TV commercials. According to Kantar Media, marketing spending jumped to $42.5 million through September, from $31 million in 2010.
-- Dealer satisfaction is improving. Maloney said Volvo jumped to 14th in overall ranking, up from 21st, in the latest NADA dealer attitude survey, which has not yet been released. Most dealers are profitable, he said.
-- A new product strategy is in place. Vehicles based on a common flexible mid-to-large platform will appear starting in 2014, with the replacement of the flagship XC90 crossover coming first. The large S80 sedan replacement is scheduled for 2015.
-- New four-cylinder naturally-aspirated and turbocharged engines will replace Volvo's five- and six-cylinder powerplants with the new generation vehicles. Plug-in hybrids are also expected, but no firm plans for the U.S. market have been disclosed.
Volvo is still far short of its 2004 U.S. peak of 139,067 units, but it's likely to hit the 100,000 vehicle mark in 2012 or 2013, says Chip Ott, owner of Volvo of Fort Washington in Pennsylvania and chairman of the dealer council. "We need to sell 100,000 cars a year in the United States; throughput is the most important part of the business."
Ott says dealers are concerned about inventory and increasing sales, but they're also "very comfortable," with Maloney. "He has been very straightforward with us."
Maloney, a 28-year industry veteran, was hired by Ford Motor Co. after he graduated from Purdue University with a degree in business and minor in engineering. He joined Volvo in 2000 and previously was vice president of marketing and planning.
He replaced Doug Speck, who was promoted in June and moved to Sweden to become senior vice president of marketing, sales and customer service at Volvo Cars.
Maloney's an avid fan of auto racing and college football, especially Michigan teams. Maloney plays tennis and joins Volvo executives at a public court every Thursday to play doubles.
Maloney will oversee only the U.S. market as of Jan. 1, when the parent company will spin off Canada into a separate sales region.
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