A balanced spread of sales around the globe is helping Volvo Cars weather the ongoing storm. After China began to fall apart last year, the Swedish brand looked exposed yet that market’s comeback is greatly helping Volvo to offset downturns in Europe and North America.
That a year-on-year tumble of 25.5% is seen as a terrific result nicely summarises how odd 2020 has been for most car makers. That percentage is Volvo’s number for worldwide deliveries in May, the total dropping to 44,830 cars and SUVs. China is up for the second month, Sweden is doing OK, the rest of Europe not so well and the US and Canada seem to be showing signs of a bounce. The weight of China’s influence is reflected in the picture for the first five months: Volvo Cars’ global sales total was 208,479, down 25.0%.
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It’s important to note that Volvo manufactures some but not all of its main models in the PRC, plus the volume of imports isn’t significant, so a 22% rise in May to 15,132 units and a 7% decline for the year to date are strong numbers. US volume was 9,519 last month, a YoY dip of 2.5% although the 1 January-31 May decline was 18% to 32,870 vehicles.
In contrast to China and the USA, Europe was a horror story during the fifth month of 2020, deliveries halving to 14,965 and by 34% to 94,758 for the year to date. Yet in the context of what happened to other brands in the region, a 50% plunge isn’t too bad a result.
Recharge
SUVs now make up almost two thirds of the brand’s sales, and while still not a big part of overall volume, what Volvo now terms its ‘Recharge’ models (PHEVs and EVs) have been rising as a percentage of overall volume. The bet on electrification will be the company’s next major challenge should car buyers fail to embrace PHEVs and EVs in sufficient volume.
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By GlobalDataThe arrival of an electric XC40 fairly soon may see the influence of the brand’s first series production EV pushing up the importance of this small SUV too. As of now, the XC60 remains the best selling Volvo, but the XC40 is catching up, and even the bigger, older XC90 still performs well (mainly in the USA) to the extent that it’s still the global number three. During the first five months, Volvo sold 61,064 XC60s (2019: 80,314), 50,867 XC40s (2019: 50,278 cars) and 29,324 XC90s (2019: 38,648).
The US factory remains something of an issue, with the decision to manufacture the S60 there a curious one, to put it politely. That isn’t using today’s reality as an unfair yardstick either, as sedan sales were already in steep decline and SUVs surging at the time when Volvo chose to put this model rather than the XC90 or XC60 into Ridgeville. It’s hard to know if there will be another S60, especially as the car is still fairly new and the jury is out on whether or not electric sedans can be profitable, the runaway sales success of the Tesla Model 3 notwithstanding.
Overall, Volvo’s future looks bright, albeit with a few caveats such as the understandable choices of spending big on EVs and slightly less so on AD having no guarantees of one day becoming major money makers. If those bets pay off, and margins equal to or better than those from fossil fuel models one day become a reality, this medium sized auto maker may rise in size to become closer to the German Three big boys.
SUVs
Thanks to its parent firm’s apparently deep pockets, this modestly sized car maker continues to be something of a trailblazer in exploring all manner of high risk strategies. Five, six and eight-cylinder engines are long gone; diesel is on the way out; the dashboards of all models went digital partly as a means of saving money with a predictable backlash over perceived safety now becoming louder; all cars’ top speeds are limited to 180 km/h; and there is a lot of money going into EVs and new-ish factories in China and the USA.
Another gutsy move is the decision to enter a segment where the likes of the BMW X7 and Mercedes GLS are finding a lot of success. Volvo will do this in a far braver way though, although with no six- or eight-cylinder engines it has no choice but to go down the PHEV and/or EV route for propulsion. In short, a 5.2-5.5 m long SUV will be heavy and need a lot of torque so the future XC100 Recharge might even be EV-only. There could also (or instead) be a C90 coupe version of the next XC90.
The XC100 name isn’t official but whatever it ends being called, the largest model yet from the Swedish firm is due for launch in the second half of 2023. The same SPA 2 architecture as the third generation XC90 will be its basis. Volvo’s South Carolina factory will make each of these related vehicles. Details of XC90 3 as well as an electric variant can be found in PLDB.
Volvo would offer the XC40 in electric form, the company told the media in April 2018 as it revealed a plug-in hybrid version. The XC40 P8 AWD Recharge will be the first such series production model from Volvo (the plug-in C30 was a low volume experiment). Whilst the electric XC40 was revealed to the media eight months ago, deliveries are not scheduled to commence until late September.
The vehicle itself looks very similar to other XC40s but the charging flap is on the opposite side of the car, the grille is replaced by a body-coloured panel and RECHARGE is stamped into a piece of plastic on the car’s rear pillars, while the mirror covers are black and there is a tailgate badge which declares P8 AWD RECHARGE. There is additional storage space under the bonnet too, although this is limited to a mere 30 litres (see pic above).
According to the company, “Recharge will be the overarching name for all chargeable Volvos with a fully electric and plug-in hybrid powertrain”. The company also stated at the same time: “Over the next five years, Volvo Cars will launch a fully electric car every year, as it seeks to make all-electric cars 50 per cent of global sales by 2025, with the rest hybrids”.
The company’s system of model names can be confusing and its suffixes even more so:
- P: using the XC40 P8 AWD Recharge as an example, the P is for ‘Pure’ which means electric and the 8 signifies battery capacity of just below 80 kWh
- Recharge means fully electric but, it can apparently also mean petrol-electric plug-in hybrid (will T disappear?)
- T: followed by a number which doesn’t seem to signify anything, where the T stands for Twin Engine, which means PHEV [for reasons unknown, T5, T6 and T8 exist but not T7]
- B means 48V petrol mild hybrid or diesel mild hybrid and the letter stands for Battery
- D: stands for diesel (D3, D4, D5) but such engines will be phased out; D5 used to mean five-cylinder diesel but now it means four-cylinder diesel
There had been speculation that Volvo was developing another SUV. Volvo told its US dealers in February that a ‘C40‘ crossover was coming, and this is expected to be the same model as what some had been calling the future ‘XC40 Coupe’ or ‘XC50’. Production should commence towards year end.
The C40 should have the same powertrains and platform as the XC40 but a unique body with a lower roofline. The development code could be V317 but this is not confirmed.
An XC20 is believed to be on the way for launch in China and Europe by 2025. This 4 m long SUV would be built on B segment Modular Architecture (BMA). Geely uses this same platform – a shortened version of CMA – for a variety of small models [each is listed in PLDB]. Most are or will be available with Volvo’s 1.5-litre three-cylinder petrol engine as well as a forthcoming 1.0-litre derivative.
Cars
Speaking to the media at an event in London in January 2019, Volvo’s Lex Kerssemakers said there would be a fully electric version of the V40 successor. He did not say when what is tentatively termed ‘V40 P8 Recharge’ would go on sale. It is presumed that Volvo will market this model as a crossover only, not a hatchback: the previous entrants in this segment were the V40 hatchback and the slightly elevated and less successful V40 CC.
Unlike previous generations of the S60, and as noted above, the current one isn’t built in Europe. The car was revealed at an event in South Carolina in June 2018 with series production commencing two months later at Volvo’s US plant. Ramp up was slow and exports to left- and right-hand drive European countries got underway until February 2019.
Ridgeville, the Berkeley County plant in South Carolina, builds only this model, although the next XC90 is due to be added added in 2021, taking the factory’s annual combined capacity to 150,000 units per annum.
Unlike the previous generation model, there is no S60 L for China as the wheelbase of the V431 series S60 (2,872 mm) is even lengthier than that of the previous S60 L (2,856 mm). Build in China commenced in December 2019.
There should be a facelift for both Ridgeville- and Chengdu-made models in 2022 and potentially, replacements in 2025, depending on how strong demand for V431 is during the next year or two. Volvo might only manufacture a next generation model in China or it could turn the car into a competitor for the Tesla Model’s successor. Worldwide, S60 sales numbered 16,054 for the year to the end of May (12,488 for Ridgeville + 3,566 for Chengdu) and 27,979 in CY2019 (plus 1,087 Ghent-built units of the old model and 13,513 of China’s former S60 L).
Reports for many other manufacturers’ future models are grouped in the OEM product strategy summaries section of just-auto.com.
Future platform intelligence
More detail on past, current and forthcoming models can be found in PLDB, the future vehicles database which is part of GlobalData’s Automotive Intelligence Center. That includes models not listed above such as certain autonomous vehicles which Volvo executives have spoken about.
This was the fourth in a five-part series of reports which look at the passenger vehicle divisions of Geely Holding. Brands covered so far have been Maple, Geometry (Jihe/Ji He) and Geely itself; followed by Lynk & Co plus Proton and Lotus. The final division to be examined will be Polestar.
