As Geely eyes Volvo, sales surge in locally made model

The S80L that caters to the local preference for roomier sedans is driving Volvo sales in China.

Volvo Cars Corp, which Chinese carmaker Geely Group wants to buy from Ford Motor Co, is gathering steam this year in China as it strives to catch up with bigger competitors.

The Sweden-based company's China sales from January to August surged by 42 percent over the same period of 2008 to 12,000 units, about the same as all of last year, Volvo Cars China said in a statement to China Daily.

The company said the strong performance was mainly due to the popularity of Volvo's flagship model, the S80L sedan, which was put into local production in March.

Combined sales of its S80L and S80 models soared by 150 percent over the first eight months of last year, Volvo Cars China said, without revealing a specific sales figure.

Alexander Klose, CEO of Volvo Cars China, said main drivers for the robust growth include the company's deeper understanding of the local market, successful product strategy, effective market program and its premium brand image.

"The successful new product launches have gotten positive market feedback and the brand promotion programs have boosted our premium image. We are confident that we will be able to continue growth in the future," Klose said.

With the slogan "Volvo For Life", the company started local production in 2006 when it launched the S40 compact sedan at its parent Ford's joint venture with Chang'an Motor Corp in the southwestern municipality of Chongqing.

It was a later arrival than Audi, BMW and Mercedes-Benz - one of main reasons Volvo's sales in China trail its rivals. In the first half of this year, Audi and BMW moved more than 66,000 and 36,000 vehicles in China respectively.

Volvo's current lineup in China also includes the imported XC60 and XC90 SUVs as well as C30 and C70 coupes. It now has a total of 75 showrooms and sales stores across the nation .

The company said it will continue to introduce new models and expand its sales networks.

Molly Tang, a senior market analyst with Beijing Polk-Catarc Co, a China unit of US auto consultancy R L Polk & Co, said Volvo is strategically shifting its priority from Western markets to China, which is a rare bright spot in the world's gloomy auto industry, especially in the premium car sector.

"Volvo leads in auto safety and it has potential to further grow and move closer to bigger rivals in China. But it needs to speed up localization of its products to tailor to the need of Chinese buyers," Tang said.

Indicating its growing understanding of the Chinese market, Volvo has done well in localization of the S80L as it extended the model's wheelbase by 140mm to meet local demand for roomier sedans. The model is available only in China.

Audi and BMW have already provided longer-wheelbase models in China. Mercedes will also launch a long-wheelbase C-Class sedan in China before the end of next year.

Industry research firm JD Power & Associates predicts that luxury vehicles sales in China will double to 600,000 units a year by 2015 from 2008.

To strengthen its "new bold, impassioned and refined" brand image, Volvo has carried out an aggressive marketing strategy this year in China while other brands drop part of the sector due to the ongoing global financial crunch.

Its main marketing programs this year include China debut of the Volvo Ocean Race in February, the 15th Volvo China Tennis Open in April, full lineup display at Shanghai motor show in April, launching of the Volvo Social Elite Club in July and complete line-up test drive for customers and media across 20 Chinese cities last month.

(China Daily 09/07/2009 page7)