Volvo pins hopes on China market expansion with more models

Manufacturer aims to grow its sales in the country to 200,000 cars in 2020

Swedish automaker Volvo Car Corp plans to introduce more models into China as it plays catch-up in the world's biggest car market.

Chen Lizhe, sales chief of Volvo Car Greater China, said last week that the company, owned by Chinese billionaire Li Shufu, will launch an imported all-new XC40 compact SUV in the Chinese market later this year. He added local production of the model will start in China from 2019.

The carmaker will also offer the locally-made all-new S60 mid-sized sedan, the imported all-new V60 crossover wagon, the imported refreshed XC90 large SUV in 2019.

Chen said the latest offerings will help Volvo grow its China sales to 200,000 cars in 2020 from 114,000 units last year. Globally, the Gothenburg-headquartered company aims to sell 800,000 vehicles in 2020.

Volvo is one of several second-tier premium car producers in China, which also include Cadillac, Lexus and Jaguar Land Rover. They lag far behind Germany's three premium car giants, BMW, Audi and Mercedes-Benz, each of which sold around 600,000 cars in China last year.

Volvo's Senior Vice-President Yuan Xiaolin told China Daily last week, "Chairman Li Shufu expects we can sell much more cars in China in the longer term."

"What we should do now is to improve our system-wide capabilities from R&D, procurement and manufacturing to sales to lay a solid foundation for the goal," he said.

"Our biggest challenge at present is how to enable Chinese customers to think of our products and experience our products when they want to buy a luxury car ... Our brand and product awareness is still limited among potential buyers in our biggest single market," Yuan said.

"We will have to grow faster than the industry when we have favorable market conditions. And we would not lose steam if the conditions are adverse. By doing so, we could surpass several competitors," he added.

The company sold 18.4 percent more cars in China in the first half of this year compared with the same period in 2017, totaling 61,480 units, which is faster than the average growth rate of 15 percent in the premium car market.

According to Chen, Volvo aims to deliver a total of more than 130,000 cars in China this year. He said the all-new XC40, to be exported to China this year and locally-made in 2019, will target "stylish and self-confident young urbanites".

The compact SUV, which recently gained a five-star rating in Europe-NCAP crash tests, will go head-to-head with the Audi Q3, Jaguar E-pace and the Cadillac XT4 in the rapidly-expanding segment.

"The all-new XC40 will give Volvo a much younger brand image and help boost sales of our other products in China," Chen said. Volvo now has 10 models and variants available in China, with the S90 large sedan, S60 mid-sized sedan and XC60 mid-sized SUV locally produced.

The company has three vehicle plants and an engine factory in the country.

It established an R&D center in Shanghai in 2015.

Volvo now has a total of 234 dealerships in 143 Chinese cities, covering all first and second-tier cities. Chen said Volvo will speed up efforts in personalized marketing and promotion of a Nordic lifestyle to build closer links with potential young customers in China.

Yuan said, "More and more people in China, especially youths, pursue self-recognition and care for others and the society, which matches Volvo's brand value, products and services."