Home: Motoring > Automobile hot topic Q&A (Ep.234)

Volvo and S90 are not what they used to be

From:Internet Info Agency 2020-08-12 14:38:25

Author:He Lun, IIA’s Co-Chief Content Officer, Deputy Head of IIA Academy of Auto

Automobile hot topic Q&A (Ep.234)


The launch of S90 facelift coincides with the 10th anniversary of Geely's acquisition of Volvo. At the beginning, this medium and large sedan was called S80. In 2016, it was renamed S90 based on the new SPA expandable module architecture to deliberately emphasize the "full upgrade". The changes in this Volvo flagship sedan reflect to a certain extent the development and changes of the Volvo brand over the past 10 years.

Q: What do you think of the S90 facelift?

A: The appearance and interior trim only have been fine-tuned. The main change is the introduction of a 48V light hybrid system, which increases power and reduces fuel consumption. In addition, other configurations have improved, so the price increase is logical. However, the entry-level model dared to rise into the price range of 400,000 yuan, comparable to the Audi A6L, reflecting the manufacturers' confidence in this new car.

Q: From S80 to S90, how big is the change of Volvo's flagship sedan?

A: Needless to say the changes in design, technology, and craftsmanship. The key is sales. The global sales of the S90 have been around 57,000 in the past two years, which is more than three times that of the year with the highest sales of the S80 after 2010. It is indeed rare for an old model to have such a surge in sales after the replacement. Especially a flagship model, its strength is vital to brand promotion.

Q: Compared with similar models of Audi, BMW and Mercedes-Benz, S90's annual global sales of 57,000 vehicles is only the half-year sales of rivals in China. What's your comment?

A: You can't compare the S90 with its German rivals. They are of different magnitudes, and they must be compared with rivals in the second camp of luxury brands. Looking at the global market, the S80 ranked third in this camp for a long time, while the S90 has risen to the first place and is far ahead of the second-placed Cadillac CT6. Therefore, whether it is viewed vertically or horizontally, the success of the S90 is beyond doubt.

Q: The data I got is that the global sales of S90 last year was 56,000 units, and it was 43,000 units in the Chinese market, accounting for 77%. It seems that Volvo's development in recent years is particularly dependent on the Chinese market, right?

A: Not exactly. Let's compare the sales of Volvo brand globally and in China. Last year, Volvo’s global sales of 705,000 vehicles and 155,000 vehicles in the Chinese market accounted for only 22%, while the German BBA in the first camp accounted for 30-37% of China’s sales, and the second camp’s Cadillac reached 54%. Lexus Although it is a purely imported brand in China, its sales accounted for 26%, which is also higher than Volvo. This shows that Volvo still has a lot of room for expansion in China.

The S90 has a very high sales volume in China. I think it is mainly caused by Volvo's different product strategies in different markets. The Chinese market has extremely high demand for medium and large luxury cars. Where it is mainly sold, it is where it is mainly produced. It can quickly respond to the needs of localized consumers and realize the interconnection among the three major markets of China, Europe, and the United States. This is also the manufacturing strategy that Volvo adheres to. Now that the S90 occupies favorable conditions, it is understandable that the proportion of sales in China is very high.

Q: 10 years ago, Volvo's global sales were 370,000 vehicles, and last year it increased to 700,000 vehicles. What do you think of this change?

A: 10 years ago, Volvo was ranked fifth among global luxury car brands and second in the second camp of luxury brands, and this is still the case 10 years later. The difference is that now the second position is quite stable. In addition, more importantly, 10 years ago, Volvo suffered a loss so that Ford had to sell it cheaply, but now it has become the profit cow of its parent company Geely Group. This is the most remarkable. Li Shufu's acquisition of Volvo really made a profit.

Q: Can Volvo maintain its current momentum?

A: I personally think that there is no problem in terms of product design, technology, and manufacturing process. In particular, once the S40, which has been discontinued for many years, is replaced and listed, it will become a mainstream model that will add more vitality to the Volvo brand.

Volvo's biggest problem is that its globalization strategy has encountered great challenges. The original top-level design was based on the complementary advantages of the three major bases in China, Europe, and the United States, to maximize economies of scale and reduce costs. Today, in the context of the Sino-US trade dispute and the epidemic, the resetting of the global industrial chain and the reorganization of the supply chain have made Volvo's beautiful planning a problem. How Volvo will adjust for this is worthy of attention.

Editor:He Lun