DETROIT -- Volvo plans to increase leasing and spend more on advertising in the United States this year, moves made possible because new owner Zhejiang Geely is investing in the brand.
“We were running on a strategy maintaining margins at the expense of volume,” says Doug Speck, CEO of Volvo Cars of North America.
Volvo's lease penetration was about 10 percent last year but will rise to 20 to 30 percent.
This month, Volvo began offering competitive lease rates -- such as $299 a month for 36 months with $1,995 down -- on the new S60 T5. The new leases will be primarily on the S60 and the XC60 crossover.
But Speck says Volvo won't reach the 40 to 50 percent leasing penetration of some of its luxury competition. That's because Volvo's offer of free scheduled maintenance for five years or 60,000 miles “makes buying a Volvo a very good value by comparison and will balance the percentage of what we do in leasing,” he said.
Volvo will also sharply increase its advertising this year. Speck said spending in the first quarter alone will be “equal to the amount of money we spent last year.”
The spending will include TV advertising, which last year Volvo used only for two weeks to promote the redesigned S60.
Volvo expects a double-digit increase in 2011 sales, primarily on the strength of the S60 and XC60.