Volvo woos China’s rich

August 19, 2014 - 12:00:00 am
Volvo cars are displayed in a car dealership showroom in Riga, Latvia, yesterday.


GOTHENBURG, Sweden: With headlights shaped like Thor’s hammer and space for a humidity-controlled cigar case, Volvo’s new cars are sporting luxury features and designer glitz to catch the eye of the booming Chinese market and shed their safe-but-dull skin.

The XC90 SUV launch on August 26 will be make or break for a company moving into a premium market dominated by German rivals.

It will be the first fully new car under Chinese parent Zhejiang Geely Holding Group Co, which bought Volvo from Ford Motor Co four years ago, and heralds the revamp of its entire product range to more upmarket models.

It follows a five-year, $11bn investment programme aimed at doubling Volvo sales, which for two decades have been stuck at around 400,000 cars a year.

It hopes the new line will reverse declining sales in the US, but must persuade customers to spend up to ¤100,000 for a brand many associate with functional family cars.

“Prices will be the same level as competitors like the Germans,” said Volvo CEO Hakan Samuelsson. “Customers should not expect to buy them cheaper than an Audi.”

The new cars aim to reconcile strategic tensions in the 87-year-old carmaker, which remains wedded to Scandinavian understatement, greenness and an emphasis on safety, but also wants to make swanky cars that will seduce affluent Chinese customers away from the likes of BMW, Mercedes-Benz and Audi.

The XC90 has anti-collision detectors that will brake the car on dangerous left turns, and the company says its four-cylinder engine is an industry beater in terms of combining power with low emissions.

But the first preview of the car, for a small group of journalists at the company’s headquarters in Gothenburg, shows design is to the fore. The seven-seater features a sleeker logo, and inside are Scandinavian touches of light wood and leather, a tablet-like, touch-screen control panel, and a minimalist dashboard. The head of the gear stick is Swedish crystal.

“This is Scandinavian design without the bling-bling,” said chief marketing head Alain Visser. “The XC90 is a signal that we are here as a premium brand. It is a signal that other models are going in that direction.”

The XC90 will be followed next year by a S90 sedan, aimed at the United States and China, which could become the world’s biggest premium market by 2020.

Last year Volvo owner Li Shufu was reported to have called Volvo’s interiors “too Scandinavian”, and the rollout of the new cars will show that Volvo has accepted many of the Chinese demands.