Are Volvo’s Best Days Still Ahead?

Volvo XC90 R-Design - model year 2016

Growing up, Legos held a special place in my heart and a special corner in the toy closet. I kept them in one large, white-topped Rubbermaid storage bin (lest my parents find one underfoot at the wrong hour of the morning) and can’t fully fathom how many hours I spent digging through piece after piece to find a color-matching, 2×1-size brick. I took great pride in my creations, but even greater satisfaction in dismantling each, pouring the bricks back into my big rubber container, and starting the process all over again.

Volvo, albeit on a much larger scale, seems to be enjoying the same process. The Swedish automaker famous for safety and right angles was sold by Ford to China’s Geely Automobile in 2010. The new owners immediately began dismantling and rebuilding the brand, starting with the flagship XC90 SUV. Six years later, the strategy is paying off.

Almost immediately after the purchase, engineers began developing the second-generation XC90. The previous iteration had been in production since 2003, and the new model focused heavily on efficiency and safety. Designed specifically with the United States in mind, the new XC90 launched in 2014. We’ve already announced it as one of the best family cars of 2016, but by 2018, Volvo expects it to be the oldest model in its fleet.

Sales have flourished, with the XC90 outselling the popular (and German) Audi Q7 this past August, and total Volvo sales figures have grown 29% so far in 2016. The S90 has already earned praise for its stylish, decidedly un-Volvo design, the V90 station wagon and V90 Cross Country are slated to arrive in 2017, and the 60-series cars—the XC60, V60, and S60—should be all-new by the end of 2018. Volvo Car USA CEO Les Kerssemakers announced that the company would see 75,000 U.S. sales by the end of the year, with 100,000 sold expected in 2018.

Volvo’s success in stripping down and rebuilding its entire product lineup leaves us wondering: What other manufacturer should do the same? Fiat Chrysler Automobiles has announced plans to move away from small cars and toward more SUV production, and Cadillac has spent over a decade revamping its image, from the first-generation CTS to the latest flagship CT6 sedan. Will these companies find the same success as Volvo? Selling 100,000 cars wouldn’t quite match the safety-oriented automaker’s peak U.S. sales figures from 2004, when 139,000 Volvos shipped, but Volvo is now in a strong position, the XC90 is an enormous hit, and the company’s best days may still be ahead. It’s taken the company 6 years to rebound from its low point in 2010 (when it recorded just shy of 54,000 U.S. sales), and I doubt any Swedish executive has plans to stand pat.

What automaker has the most to gain from a full-lineup re-design?

-Matt Smith

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