Volvo revival reaches 'end of the beginning'

PINEY LAKE, Colo. -- Volvo Car USA has turned the corner with two of its 90-series vehicles on sale and others due early next year, its CEO says.

Grinning broadly at a press launch 9,350 feet above sea level in the Colorado Rockies, Lex Kerssemakers says a U.S. sales increase of 29 percent through August is evidence that Volvo's gutsy revival strategy was the right choice. Volvo is building all its vehicles on its flexible Scalable Product Architecture, or SPA. And it is using only turbo and supercharged Drive-E engines paired with optional plug-in hybrid power.

"We are on a turnaround in the U.S. that started with the XC90," Kerssemakers said in an interview.

Volvo was starved for product for years after its ownership by Ford Motor Co. The Swedish brand was sold to China's Geely in 2010 and began developing new products and engines -- the first of which was last year's XC90 crossover. 

So with more of the 90-series line coming to market, "we are at the end of the beginning," Kerssemakers said. 

U.S. sales of the redesigned XC90 crossover through August totaled 21,760 units -- higher than the competing Audi Q7 -- and are expected to grow to 30,000 vehicles this year, he said. 

Next year, sales of the new V90 Cross Country unveiled here will account for an additional 5,000 to 6,000 units, Kerssemakers said. The Cross Country is a rugged version of the V90 station wagon with high seating, high ground clearance and standard all-wheel drive. The S90 sedan is already on sale. The V90, V90 Cross Country and the new long-wheelbase S90L go on sale in early 2017. 

The XC90 and the Cross Country were both developed primarily for the U.S. market, and the larger size of the S90L makes it ideal for sale here, Kerssemakers said. Volvo's 300 U.S. dealers, most of whom stuck with it during its dark years under Ford ownership, are showing their approval of the brand's plans and growth by heavily investing in new or renovated showrooms, Kerssemakers said. Last year, 70 agreed to participate in the Retail Experience program, which features a light, open Scandinavian design. This year, Volvo expected about 40 to sign up, but to Kerssemakers' surprise 90 already have and the remaining stores are likely to do so by year end or in early 2017, he said. To improve its customer service, Volvo this month launched a three-year training program for all dealership personnel who have direct contact with customers, Kerssemakers said. Volvo's U.S. sales will easily top 75,000 units this year, Kerssemakers said, but the brand won't hit the magical number of 100,000 vehicles until 2018. Volvo sold 52,892 vehicles through August. 

By the end of 2018, Volvo will have rolled out its 60-series vehicles -- which will include the midsize XC60 crossover and the S60 sedan. The sedan will be built for the world at Volvo's greenfield factory in Ridgeville, S.C. 

Volvo chose South Carolina rather than Mexico, where some competitors, including BMW and Mercedes-Benz, are building plants, because of the importance of the U.S. market and as a show of its commitment here, Kerssemakers said.

Today's XC60, which is still on the EUCD platform from Ford, showed a U.S. sales decline of 22 percent to 12,770 vehicles in the first eight months. The current-generation XC60 went on sale in the United States in 2009. 

Kerssemakers won't give timing for the new compact 40-series vehicles -- which will include the new XC40 crossover. 

The smaller vehicles, which will likely include a sedan and wagon, will be key in growing volume and will compete with competitive entry models such as the Mercedes-Benz CLS sedan and the BMW X1 crossover.