Safety, quality to drive growth

The Dongfeng sailing team won the race for start position in the Volvo Ocean Race during its Sanya stopover on Feb 8.

As the round-the-world competition set sail for the next leg to New Zealand, the heads of Volvo Cars talked about the company's own journey in Nordic luxury.

The biggest challenge in its voyage to China has been conveying Volvo's core values to customers, said Hakan Samuelsson, Volvo Car Group president and CEO. The group is owned by Chinese carmaker Zhejiang Geely Holding.

Though China is already its biggest market, "Volvo is relatively small compared with very big players in the luxury segment, and we need to be on the customers' shopping list", said Samuelsson.

Lars Danielson, CEO of Volvo Car China, outlined the values that make Volvo a premium car.

"Volvo's quality is based on our build process, global engineering standard and manufacturing system," said Danielson. "Wherever the car is produced, it follows Volvo Cars' global quality.

The assertions are borne out by global market research house JD Power, whose survey of consumers found the China-made Volvo XC60 had highest initial quality among all midsize luxury SUVs at the Chinese market last year.

Volvo Cars announced last month that the S60 Inscription sedan will become the first domestically assembled luxury car shipped to the United States.

The model was designed and developed in Gothenburg, Sweden and produced by the company's Chengdu plant in Sichuan province.

Exports of the China-made Volvo sedan demonstrates the consistent quality of the carmaker's products made around the world, said Samuelsson.

Volvo Car China sold 81,121 vehicles in 2014, a 33 percent rise from 2013, much higher than the 13 percent in the Chinese auto market as a whole.

Sales in the overall premium segment grew 21 percent.

As Volvo's largest market, sales in China contributed 17.4 percent to the carmaker's global volume last year.

The company expects China will contribute about one-fourth of global sales by 2020.

Volvo Car China's mid-term target is a 10 percent market share with annual sales of around 200,000 units, while the global target is set at 800,000 units.

Volvo is now the No 5 luxury brand in the Chinese market in annual sales following Audi, BMW, Mercedes Benz and Land Rover, according to Fu Qiang, president and CEO of Volvo Car China Sales Co.

Industry data shows Land Rover sold 99,358 units last year in China, 22.5 percent more than Volvo, while market leader Audi sold 578,932 units.

"To achieve growth, more products is the answer. And the second is to continue extending the network," said Samuelsson.

A total of 11 vehicles are in the 2015 Volvo lineup including the S60L plug-in hybrid made locally, the new XC90 SUV, a new XC90 plug-in hybrid and the V60 Cross Country, according to the company.

The XC90 SUV built on Volvo's latest scalable platform architecture, or SPA, "will bring up Volvo to a new level of performance and technology", said Samuelsson. "It applies unique Drive-E powertrain technology with strong output but low carbon dioxide emissions."

Investment in research and development on the new model totaled $11 billion. Among its many standard features are the company's IntelliSafe technologies - collision avoidance, park assist pilot, a lane keeping aid, cross-traffic alert, pre-activated safety belts, intersection braking and priority seating. A 360-degree camera is optional.

IntelliSafe will be launched as a technology sub-brand this year, the third of its type after the Volvo Drive-E and Sensus. The new model is expected to be the safest SUV in the world, the company said.

"No casualties, no emissions" is among Volvo Cars' targets by 2020, said Samuelsson.

"We call it new luxury, it is a car that understand you, protect what is important for you, and make you feel special," he added.

Last year, all 1,927 of the new XC90 Limited Edition models were sold out in 48 hours with 200 of the orders from Volvo Car China's e-commerce channel.

Danielson said that Volvo Car China's started in e-commerce together with its dealers to explore new approaches to Chinese customers. On the ground, the dealership network expanded to 187 outlets in 2014 and will keep growing this year, said Fu.

Chinese National Geography's editor-in-chief Li Quanke said the Volvo has a good fit with the changing China. "Chinese people are elevating themselves into an honorable and respectable lifestyle. The self-improving lifestyle should become more popular," said Li. "There are opportunities for Volvo Cars' new luxury in the new consumer behavior."

haoyan@chinadaily.com.cn

(China Daily 02/16/2015 page19)