LOS ANGELES -- At most companies, having the newest products selling 20 percent below sales projections would cause plenty of hand-wringing.
But executives at Volvo Cars of North America Inc. seem remarkably placid about their slow-selling S40 sedan and V50 wagon. They say sales in other countries are picking up the slack, and profit margins on U.S. sales are slim but solid.
The redesigned S40, which went on sale in February 2004, was expected by Volvo to sell 30,000 to 35,000 units annually. The redesigned V50, which arrived four months later, was expected to notch 6,500 to 8,000 sales a year.
But this year, the two vehicles combined are likely to sell only 32,000 units.
Volvo executives blame the poor sales on foreign exchange rates. The weak dollar, they say, makes it difficult to price the S40 and V50 competitively.
But rivals such as the Audi A4, Volkswagen Passat and Acura TSX also are fighting the weak dollar.
Volvo executives maintain that the cars are increasing share in the declining "small-premium" segment. The vehicles also are attracting customers who, on average, are six years younger than typical Volvo buyers and who are new to the brand, they say.
Compared to the previous-generation totals for the S40 and V50, sales are up sharply: 56.1 percent through April, to 10,481. But in 2004, sales of the redesigned S40 were ramping up and the outgoing V40 was in a sell-down mode, so the numbers are only loosely comparable.