SHANGHAI -- Volvo will not develop a flagship sedan to challenge the BMW 7 series, Mercedes-Benz S class or Audi A8.
Speaking at the auto show here, Volvo CEO Hakan Samuelsson said such a flagship doesn't fit Volvo's green image and is not, in fact, the sort of vehicle that Volvo customers would even consider.
"We don't have any ambitions to go into a segment where we would compete with vehicles that have V-8 or V-12 engines," he said. "We don't believe it would fit our brand image."
Talk of a Volvo luxury flagship surfaced in 2010 after Zhejiang Geely Holding Group Co. purchased the Swedish automaker from Ford Motor Co. for $1.5 billion. Geely Chairman Li Shufu suggested Volvo should compete directly with BMW, Mercedes and Audi.
But Volvo's CEO at the time, Stefan Jacoby, said a luxury sedan wouldn't fit Volvo's image. Jacoby stepped down last year after suffering a stroke. But his successor shows no desire to convert Volvo into a wannabe German luxury brand.
Samuelsson said he's sticking with his plan to use Volvo's new SPA platform to underpin the redesigned XC90 and generate a replacement for the S80 sedan.
Volvo and Geely also are jointly developing a platform for a family of compact cars -- China's biggest market segment and, arguably, the segment in which Geely could profit most from Volvo's expertise.
Their first effort: the five-door Volvo V40 hatchback introduced at the auto show. Volvo will launch the V40 in China this year. The car debuted in Europe last year.
Samuelsson says he's moving ahead with plans to launch Volvo production this year in a Geely plant in Chengdu. He plans to have 250 Volvo stores in China in a couple of years, up from 150 now.
Samuelsson isn't ready to abandon Volvo's goal to raise annual sales in China to 200,000 units by 2015. That's an ambitious target, given sales of 42,000 last year.
Samuelsson shook up his Chinese organization and insists he sees "no reason to change that goal." But he left a loophole. If Volvo can develop good products, good dealerships and a good organization, the sales target will take care of itself.