High expectations for premium-priced Volvo XC90

VOLVO will pitch its all-important second-generation XC90 SUV as a more premium offering than the current model when it arrives in local showrooms in the second quarter of next year, with spec and tech upgrades to rival German counterparts.

The replacement for the 11-year-old original will get its public debut at the Paris motor show in October, with Australian sales expected to start in May.

While the current model started out as a premium offering when it launched in 2003, it is now positioned well below its rivals with prices starting from $69,990 for the petrol R-Design before topping out a $75,990 for a diesel-engined D5 Executive.

The Swedish brand’s local arm is remaining quiet on possible pricing for the XC90, but its rivals range in price from $90,500 to $129,300 for the all-wheel-drive, seven-seat Audi Q7, while the rear-wheel-drive optional seven-seat BMW X5 starts from $83,900 to $148,400 and the all-paw Mercedes-Benz ML jumps from $83,500 to $181,900.

Speaking with media last week, Volvo Car Australia managing director Matt Braid said the XC90’s level of technology and safety, and comfort features would see it priced more in line with some of its rivals.

“The new car will be priced higher than the outgoing model, without a doubt,” he said. “It will be higher spec than the outgoing model. So it does place us back into the luxury SUV segment, which the current model, due to its age and direct competition, has probably stepped out of that a little bit.

“But now we are going back into it and well aware that’s going to be highly competitive as well.”

Mr Braid said the long lead time from the first release of information in May to the local launch will work in its favour as it provided potential buyers with ample information about the new car that could potentially lead to early sales.

“We want to make sure we present the car in as much details as possible before launch. We will also be in a position to have the best amount of information on specification and pricing earlier than we have had on most other launches.” he said.

“We will be able to potentially sell the car before its launch. We are not going to be silly and say we are going to pre-sell thousands, but at least we will be able to engage with customers in the market for an SUV, either existing or new SUV customers.”

Mr Braid said the Swedish brand’s local arm is expecting sales to increase slightly when compared with the current XC90, but it is being “conservative” in its targets given the difference in the two generations.

“It is going to be a different car. It takes the XC90 heritage and name but it’s a completely different offering, as an 11-year gap would testify the way the product has moved on.”

Expectations for the XC90 are high, but Mr Braid said he did not believe it will reach the sales highs of some of the segment leaders, such as the BMW X5, but there is definitely room for growth in the local market.

“In other markets we have proven to be a match for the competition. We outsold X5 in a couple of markets, we have outsold Q7, so we know we can be very much amongst it with that level of volume in that segment.” Volvo’s reputation for developing innovative safety technology will continue with the launch of the XC90, which will feature a number of completely new or heavily updated features, but Mr Braid stopped short of detailing them.

“Volvo develops its safety technology almost separately from the car-line development. If they have a new safety technology that is able to be productionised, it gets put into the next cab off the rank, so to speak, as far as models. V40 was a good example there.

“We don’t wait for our high-end model to come out to showcase the new safety tech then drip-feed down. We won’t be holding stuff for a flagship it will be whatever is available to be produced at that time will go into that car.”

From launch, the second-gen XC90 will be powered exclusively by a series of four-cylinder petrol and diesel engines built using its Drive-E efficient technology, but a plug-in hybrid is scheduled to follow sometime next year.

While Volvo Car Australia is still looking at the plug-in hybrid, it will likely become the flagship model and carry a premium over the regular internal combustion variants.

Mr Braid flagged the XC90 PHEV as the potential start of a wider hybrid strategy for Volvo in Australia, after attempts to import the V60 plug-in hybrid wagon hit a snag last year when the company could not make a local business case stack up thanks to low production numbers and strong European demand.

The current model is still shifting respectable numbers for Volvo in Australia, with 327 finding homes in the first five months of the year, but stock will start to thin-out later in the year and is expected to sell out by January 2015.