XC90 kicks off Volvo revolution

THE all-new Volvo XC90 is set to be the maker’s oldest model in just two years, as massive capital expenditure starts to bear fruit.

It is not simply down to an endless injection of cash from Chinese owners Geely either, according to Volvo Australia managing director Kevin McCann.

“Volvo is a standalone company whose shares are owned by the Geely Corporation,” he told GoAuto at the launch of the new XC90 in Canberra this week.

“As a standalone company, it's got to be self-funding and self-financing. And there's not a big pot of money in Geely that pays ours bills at the end of every month. We have to generate our own cash flow to continue to fund our own activities.”

He cited the XC90’s short four-year development time as an example, pointing out that the expenditure on the development process needs to be generated from selling the car in question.

The XC90 is built on Volvo’s new SPA architecture, which will underpin what Volvo terms the ‘90 cluster’ of cars, which is set to include the S90 sedan.

The first car off the SPA platform was set to be the long-wheelbase sedan, but a change of plan brought the XC90 forward.

“The need for that car to be in the market and get sold becomes a self fulfilling prophecy,” he said. “We needed the car quickly to get the cash to pay for it.”

Left: Volvo Australia managing director Kevin McCann

Mr McCann told GoAuto that the XC60 would also be built off the same technology, but declined to put a timeline on the replacement for the company’s best-selling model.

“If I tell you now, I’ll have to shoot you,” he joked, before adding “it’s not in the too far distant future.”“The next XC is also based on that SPA concept,” he explained. “Every one of those concepts has a certain lifetime. So within the lifetime of that, we'll certainly see the XC60 come through.”

The SPA concept will be rolled out to encompass all of Volvo’s current platforms, including the 60 and the 40 ranges, but updated versions of Volvo’s smaller cars will be launched before any platform changes are performed.

“The XC90 is the first of the 90 cluster, so we now build up the other elements of that range,” explained Mr McCann.

“I can't give you timelines today because they're not absolutely locked in, but it's a progressive roll out. Then in advance of attention to the new models of the other clusters, there are some top-up models coming in the 60 and the 40 in terms of packaging, engines, transmissions and so on.”

Mr McCann suggested the company would not reprise the three-door C30 that was discontinued at the end of 2013.

“The V40 effectively replaced the C30 but has a completely different package,” he said. “Because the C30 was a three-door car, quite unique in its design appearance and very appealing but not to a huge number of people, whereas the V40 addresses the needs of a greater range of customers.

“Balancing out the V40 range with a couple of different engines is more likely the way we go with that car for the near future.”

The seven-model Volvo line-up has sold 2720 cars so far in 2015, slipping back 14 per cent year-on-year. Its number one seller is the XC60 with 985 sales for the year, while the S60 and V40/V40 Cross Country combo have moved 508 and 807 units respectively.