The president and CEO of Volvo has refused to be drawn on speculation that parent company Ford may look to offload the business.
Earlier this month Ford confirmed that it had appointed investment banks Goldman Sachs, Morgan Stanley and HSBC to consider the future of its brands Jaguar and Land Rover. Since then, speculation has mounted that the US automaker will divest the rest of the Premier Automotive Group (PAG), of which Volvo is a part.
But, speaking on the sidelines of the Automotive News Europe Congress in Prague, Fredrik Arp told Global Insight that he would not comment on the speculation. He instead stressed that Volvo was focussing on growth.
Asked if Volvo had a long-term future with Ford, he said: “You should ask Ford about that. I am not dealing with hypothesis, I am focusing on operating and running Volvo Cars and we are doing very fine this year.”
He added that Volvo saw global sales growth of 8% year-on-year in the first five months of 2007.
The car maker has a total annual production capacity of around 580,000 units worldwide, produces about 450,000 units a year and wants to focus on making further efficiency gains to support its growth ambitions.
Volvo aims to sell 600,000 units worldwide by 2010. To this end, it is not presently preparing to set up production in India as it has just entered the small Indian premium market, but “has great hopes that the brand will drive excellent sales in India over the next couple of years even though we are talking about very thin volumes because it is a very small market currently”.
Volvo confirmed to Global Insight that the all-new XC60 crossover will come out during the second half of 2008 and development was according to plan, meaning that the production version would be very close to the concept presented in January at the Detroit motor show.
Arp said that defining vehicle segments was not easy and boundaries are increasingly being stretched by manufacturers looking to secure new opportunities in the marketplace with completely new cars.
He concluded: “Beyond the XC60 we have not any firm thoughts and I will not comment on speculation around the possible consolidation of the S40 and S60 into one model. We think about all sorts of model developments and we see the segment created by the Mercedes B-class as very interesting, at the same time we are thinking whether the XC60 will have a little brother that could be categorised as a multi-activity vehicle (MAV).”
Later in the interview, Arp said that he regretted that there was so far not a bigger trend towards ethanol in Europe. He noted that a lack of pan-European coordination and inadequate infrastructure were holding this technology back.
However, Arp added that he foresaw continued efforts by the manufacturers to share fuel efficient technologies.
“Not only because of the economic logic of sharing development costs and related investments but also because, even though companies compete on the basis of their proprietary knowledge, if one actually develops something that is very good for the world and good for the environment, then I think the pressure on those companies to share will be pretty heavy” he said.