Just a little more than one year into the job, Hans-Olov Olsson, chief executive of Volvo Cars of North America Inc., has set an ambitious goal of selling 200,000 units a year in the USA and Canada by 2004. That would be an increase of nearly 60 percent from record 1999 sales of 125,219. (US sales in 1999 were a record 116,692).
To get there, Olsson is dreaming 'The Impossible Dream' of every European importer: to increase sales in the US Midwest. But in Volvo's case, it will likely help that it was acquired by Ford Motor Co. last March.
In addition to its own dealers, Volvo now can look to Ford-affiliated dealers to expand in the Midwest. If nothing else, 60,000 people in the Detroit area alone - Ford employees, suppliers and retirees - now qualify for discounts on Volvos.
Automotive News Europe's Jim Henry interviewed Olsson at Volvo's US headquarters in Rockleigh, New Jersey. Edited excerpts follow:
You've said in the past, 200,000 was a goal for 'mid-decade.' Can you be more specific?
I have said internally that the target is by 2004. I didn't want to put a time frame on it externally. But recently, we have put a lot of effort into communicating that goal to the whole organization, not least to the dealers. You have to have them believe in it, and not just have them say, 'Yes, that's good, that's what they say, let's see what they do.' When I first came here in September of 1998, I couldn't tell people at the time. I didn't know the people, I didn't know the organization, I didn't know the dealers.
Can you achieve 200,000 with more or less the same lineup as today, or does your growth depend on launching into a new segment like sport-utilities, as BMW and Mercedes have done?
We are basically where we are going to be. We have the S40, around $22,000 to $23,000; the traditional models, you might say, the S and V70, and the new V70. With the S80 we have entered into the luxury segment; and as an extension to our traditional segment, we have the (all-wheel-drive) Cross Country - that is a segment where we have ambitions to grow, from a product point of view.
Later this year, a smaller sedan will come, smaller than the (present) S70. The S70 will terminate around the middle of this year. It will be smaller than the S70 and bigger than the S40. We will expand the line in the Cross Country segment. We are attacking the sport-utility market. It's not really a sport-utility, but it has many of those attributes.
Will you add a lot of dealers? And will Ford dealers become involved?
Our first priority is Volvo dealers. You should never break up a winning combination. But we belong to Ford Motor Co., and certainly we will protect our interest - without compromising our individual brand identity. We are building a premium brand on Volvo dealers first, then Jaguar, then Lincoln.
What about new territories?
The Midwest is fascinating to me; it's really an area full of potential. If we can get to the heart of the American market, that is our future, the true US market. We want to be the first European automaker to succeed there.
Volvo has spent a lot of resources over the past several years on developing a sexier, sportier image. True, the company always said it never abandoned its safety image, it only wanted to add other attributes, as well. But as part of a group, isn't it easier to let Volvo be Volvo?
For Premier Automotive Group, Jaguar can be the sporty brand. And we at Volvo don't have to have much, much smaller cars priced below where we are now. In the American market, Lincoln is below Volvo from a pricing point of view. We also have very different customers.
We had pressure to be everything to survive. Look at what Mercedes did to survive as a single brand, with the A-class or the M-class; these are huge strategic moves. We can focus on the three distinct segments we have decided to pursue.
Internet marketing is a big part of your plans, isn't it?
We refer to it as Volvonet. This is not just a website project; this is part of our marketing. Starting April 1, you will be able to get the whole buying experience online. You as a customer can come to a website with a modern design, that gives you all the information, with a product configurator to design your own car, with pricing including accessories, and all the financing options. You will be able to take the exterior view and turn it around and look at it from different angles. By the end of the year, you will be able to look inside the car, too.
What do dealers have to do?
Dealers buy the system from us. That is part of their investment in our growth. The dealer has to have an e-commerce department. The big complaint today is when you approach a dealer on the Internet, you either don't get an answer or it takes too long. We have enormous training going on for dealerships. The investment in the hardware is a minor cost, compared to the training and the human resources.