Volvo on track for 8000 sales in 2019

RIDING on the crest of a wave with its sales up 19.7 per cent to the end of August, Volvo Car Australia (VCA) is one of the rare success stories this year in a new-vehicle market trending downwards.

The company also expects ongoing growth as new metal enters showrooms – and more new models are on the way.

Speaking at the recent launch of the all-new S60 prestige mid-size sedan, VCA managing director Nick Connor said the company is poised to almost double its annual sales in the space of only two years, with 5078 sales recorded as at August 31 and figures for September – to be released this week – taking it further towards 8000-plus units for the calendar year.

This compares to a lowly 4681 sales in 2017 – a 20 per cent fall on the previous year – and a resurgent 6693 units in 2018, which marked a 43 per cent year-on-year rise.

“When I joined about 19 months ago, we were selling just over 4000 cars a year. This year we will get to around 8000 cars,” Mr Connor said.

“That’s not to say that volume is our primary objective here; it isn’t. Growth is important, but it’s not everything.

“Last year, we grew by over 40 per cent. This year, we’re currently growing by 20 per cent, and to put that into context, globally Volvo grew to the end of August by seven per cent across all markets and we have just under one per cent market share.

“Australia’s turnaround is greater than the turnaround for Volvo (globally), so I’m personally delighted with that.

“We’re in a good place.”

Mr Connor added that one of VCA’s goals is “continued growth” but would not be drawn on specific numbers. He told GoAuto last year that 10,000 annual sales by 2020 was being targeted.

“I am much more interested in the long-term profitability of Volvo Car Australia and the long-term profitability of the Volvo dealer network in Australia than I am in hitting a particular number,” he said.

“We’re actually in the fortunate position, globally at Volvo, that we actually have more demand than we have supply for most of our products, so I don’t have guys on the phone to me from Gothenburg saying, ‘We need you to do another 500 cars this month. We need you to do another 1000 cars this (next) month.’

“I’ve been around in this industry long enough to have taken plenty of those calls over the years – trust me – and I’m not having to take them at the moment, which is really refreshing because that allows us to do the right things in the marketplace, (including) protecting the residual values of our products.

“If you start with an attractive price point, you have a low discounting policy, your residual values will naturally be much stronger.

“We’re building demand for the Volvo brand all around the world, and we’ve seen a dramatic increase in consideration for the Volvo brand in this marketplace over the last couple of years.”

Mr Connor added that VCA’s strong performance has “been driven by the launch of new product”, naming the XC40, XC60 and XC90 as key models launched over the past four years, with the SUV trio accounting for an unprecedent 97.8 per cent of its volume in 2019.

The latest models to join VCA’s line-up are the new-generation S60 sedan and V60 wagon, which together are expected to add about 800 units of incremental volume per year.

Either way, the XC40 is on the cusp of becoming VCA’s best-selling model, with its 2041 examples sold to the end of August representing a massive 157.1 per cent increase over the 794 deliveries made during the same period in 2018.

The one-size-larger XC60 (2123 units, +15.9%) is the only model standing in the XC40’s way, while the third-placed XC90 flagship (802, +5.7%) is also finding more buyers this year, with its minor facelift having just entered showrooms.

If the XC40’s ascendance does not occur in 2019, it will likely do so next calendar year when a trio of new powertrain options are set to be introduced. This should include a T3 1.5-litre turbo-petrol three-cylinder engine that should lower the model’s entry-level pricing from $46,990 plus on-road costs (T4 Momentum) as early as the second quarter.

As GoAuto has reported, a soon-to-be-revealed battery-electric version of the XC40 will become VCA’s first zero-emissions model next year, with Mr Connor confirming that its on-sale date has been pushed back to the fourth quarter.

At the same time, a plug-in hybrid variant of the front-wheel-drive XC40, dubbed T5 Twin Engine, will launch, combining a 133kW 1.5-litre turbo-petrol three-cylinder engine with a 60kW electric motor for a combined peak power output of 192kW.

In Europe, its 10.7kWh battery provides a zero-emissions driving range of up to 46km on the WLTP standard and can be charged in as little as 2.5 hours when using the 3.7kW onboard charger.

At a date yet to be determined, Mr Connor confirmed VCA will begin sourcing the XC40 from China instead of Sweden in response to unprecedented global demand.

This move should lead to increased local supply and therefore more sales, and could precede the T3’s introduction.

VCA’s sales success this year has come amidst the discontinuation of four of its models, although the high-riding V60 Cross Country is set to return in new-generation form by the end of the first half of 2020, likely with one variant motivated by a turbo-diesel engine.

Conversely, VCA is not planning to reintroduce the current-generation S90 large sedan due to low demand, while its V90 wagon counterpart will carry on in high-riding Cross Country guise only (31 units, -6.1%), with the regular version no longer in the works.

The V40 hatch and its high-riding Cross Country sibling are also unlikely to be seen again locally, with Volvo Cars yet to commit to a new generation.

Meanwhile, Mr Connor reiterated that VCA remains on track to launch Polestar as a standalone all-electric brand in 2020, with its first model, the Polestar 2 mid-size SUV, due in the fourth quarter.

He added that Polestar executives will tour Australia early next year, looking to lock in retail stores in Sydney and Melbourne, which could be owned and operated by dealers who act as agents in the expected online sales process. A Brisbane outlet is likely to follow soon after launch.

Mr Connor was less clear, though, about the prospects of another brand, Lynk & Co, from Volvo Cars’ parent company Geely Auto, which he believes will operate separately from VCA when its ongoing global expansion is eventually felt locally, with the exception of servicing that may be done via the existing dealer network.