Volvo is considering adding a rival to BMW's Mini and the Audi A1. If that happens, the Swedish automaker would need a partner to share the costs, as well as a smaller engine, which would probably be made in cooperation with parent Zhejiang Geely of China, Volvo CEO Jacoby told Automotive News Europe in an interview.
The Volvo boss said premium-car buyers are willing to spend extra even for subcompact-sized cars. "Premium customers no longer define luxury based on the size of the car or number of cylinders, there are other attributes which will come into play," he said.
Led by the A1 and new-generation Lancia Ypsilon, sales in Europe's entry-premium segment increase 19 percent to 332,262 units last year, according to data from market researchers JATO Dynamics. Sales in the segment have slowed with the six-month total volume down 10 percent to 148,891.
The smallest model in Volvo's range is the compact-sized V40, which competes against the Audi A3 and BMW 1 series. The V40 just debuted last month, so Jacoby is not in a rush to launch a model below the newcomer.