Volvo's new owner hands in China
Record sales in the American auto industry have left the biggest carmakers flush with cash, which they are pouring into new models on display this week at the annual North American International Auto Show here.
But even the smallest auto companies are flourishing in the booming American market, none more so than the tiny Chinese-owned, Swedish-run luxury brand Volvo.
While General Motors, Ford Motor and others held lavish news conferences, Volvo showed off a new sedan, the S90, and won recognition for its flagship sport utility vehicle, the XC90, as the best truck introduced in 2015.
It illustrated how even the littlest car companies — Volvo has just 0.3 percent of the American market — can succeed when demand soars.
Bought from Ford in 2010 as part of that automaker’s retrenchment during the financial crisis, Volvo has been expanding under its new owners, Geely Auto of China, whose ambitions include Volvo’s first factory in North America.
While overall industry sales increased about 6 percent last year in the United States compared with the previous year, Volvo’s sales rose 24 percent to 70,000 vehicles, according to the research firm Autodata.
“We have always placed great significance on our presence in the U.S.,” Hakan Samuelsson, the company’s chief executive and president, said. “That is why we decided to present our S90 to the public for the very first time at the Detroit show and why we have begun to build a Volvo factory here.”
Other smaller brands that benefited from the surge in consumer demand included the Japanese automaker Subaru, which reported a 13 percent increase in sales, and Land Rover, the British maker of sport utility vehicles owned by Tata Motors of India, which posted a 37 percent increase.
“Those brands and their new owners have all gone on and have really started to flourish,” said Matt Degen, senior editor with Kelley Blue Book. “It took Volvo longer to do so, but we’re seeing it reimagine itself, and it’s really starting to connect.”
Under Geely, Volvo has emphasized the brand’s long reputation for safety and quality and its distinctive Swedish styling.
Geely was able to build on those attributes and prevent Volvo from joining discontinued brands like General Motors’ Saturn and Ford’s Mercury in the automotive graveyard.
The hot-selling XC90 wagon and S90 sedan, for example, have given new momentum to the automaker’s transformation and return to core values, Mr. Samuelsson said.
The S90, a four-door coupe that was unveiled at the show here, will go on sale this summer with a base sticker of around $47,000.
In another outgrowth of the automaker’s renewed ambitions, Volvo has broken ground on its first automotive manufacturing plant in North America, a $500 million facility in Ridgeville, S.C., that will build the next generation S60 sedan and employ 2,000 workers over the next decade.
The plant will give Volvo a manufacturing presence in its three main regions of Asia, Europe and the United States.
“The turnaround is pretty remarkable,” said Jessica Caldwell, senior automotive analyst for Edmunds.com. “New designs and features are coming together to create more interest in the brand.”
Volvo is also embracing its reputation for producing safe vehicles, joining what has been a rush by automakers to introduce technologies that enhance safety. With its latest technology, Volvo has articulated a goal of having no crash fatalities or serious injuries in a new Volvo by 2020.
“At one point Volvo ruled the safety world,” Ms. Caldwell said. “They walked away from that a decade or so ago. Now, they’re pushing the safety element, but are more mainstream, a little less quirky.”
The safety technology in the S90 will, among other things, detect pedestrians, cyclists and, Volvo says, large animals.
The car also offers new autonomous features like steering assist at high speeds and a feature that automatically maintains a set speed or distance to the vehicle in front. The car will be available in gasoline and hybrid versions.
Geely has left the management of Volvo to its Swedish executives and given Volvo the billions of dollars it needs to develop new vehicles and technology.
“We’re now seeing the results of those investments,” Mr. Degen said.