Volvo takes aim at BMW 5-series

 

As the ‘new’ Chinese owners dig deeper into the Volvo line-up, so they reveal further glimpses of the revamp put in place in 2010. One that included a R143 billion global investment that aimed to put Volvo closer to matching its German competitors and their profit margins.

We drove the S40 recently and found that it was quite a compelling package. Perhaps not quite on BMW’s level just yet, but not far off, and perhaps matching some of the lesser-German’s – if there is such a thing. Now Volvo are upping the ante with the S90; a car that takes aim at the potential 5-series buyer in the hopes to steal some more German bratwurst (read: lunch). – Miles Downard

Niclas Rolander and Elisabeth Behrmann

(Bloomberg) — Volvo Car Group will introduce a new luxury sedan next year that will replace its struggling S80 model as the Swedish company takes on cars from BMW, Mercedes-Benz and Audi in a bid to boost annual deliveries 60 percent by the end of the decade.

“We will have a true premium alternative to the three German brands,” Chief Executive Officer Hakan Samuelsson said in an interview at the company’s headquarters in Gothenburg. “That’s really what we’re working with” as Volvo targets annual sales of 800,000 vehicles by about 2020.

Volvo Cars, acquired by Chinese billionaire Li Shufu’s Zhejiang Geely Holding Group Co. in 2010, is completing a five- year, $11 billion global investment program. Projects included the introduction this year of the revamped XC90 sport-utility vehicle, the manufacturer’s first model developed entirely under Li’s ownership. Samuelsson plans to unveil the S80 replacement, the S90, at the Detroit car show in January, as part of a strategy to both increase sales and come closer to matching the German competitors’ profitability.

Volvo is targeting the S90 at potential buyers of the BMW 5-Series, Mercedes E-Class or Audi A6. The Swedish manufacturer plans to follow up with a station wagon version, the V90, and is working on more additions to its lineup, Samuelsson said.

“If you would pick some models being the most important to Volvo, it’s the SUV segment, which is growing rapidly, and you need a smaller one, of course,” the CEO said. Demand is rising for “small premium cars,” a segment that’s “very attractive for us.”

Samuelsson, 64, who has extended his contract with Volvo for another three years, stuck to a forecast of delivering about 500,000 cars this year, even as growth slows in China, the biggest auto market. The global target compares with the 2.12 million vehicles sold last year by Munich-based BMW, the biggest luxury carmaker, including its Mini and Rolls-Royce marques.

Li bought Volvo from U.S. automaker Ford Motor Co. for $1.8 billion and has been working to overhaul the carmaker while preserving its reputation for safety features. Volvo is pegging the brand’s revival on a range of new models, the first of which was the $66,000 XC90 SUV that replaced a version built since 2002. As of the beginning of this week, Volvo had received orders for 65,000 XC90s, exceeding the full-year target of 50,000.

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