Volvo CEO Hakan Samuelsson expects the Swedish brand to capitalize on what he calls the strongest product lineup in the company's history. Samuelsson foresees another year of strong growth. He also outlined ambitious targets for the automaker's growing lineup of plug-in hybrids and for its new Care by Volvo subscription scheme. Samuelsson shared these goals and more during interviews with Automotive News Europe this year.
What is your outlook for 2018?
We have never had such a strong product lineup. Now it is time to perform and to grow. This year will be another year of strong growth and improved profit.
Volvo sold more than 570,000 vehicles globally last year. Will you top 600,000 for the first time in the company's history this year?
We should continue growing at the pace we have been [between 2015 and 2017 the company increased sales between 6 percent and 8 percent]. We had some restrictions on the supply side over the last couple of years and now that is improving as we will have additional production capacity. And with our new plants in South Carolina, and Chengdu, China, we should have capacity to continue to have strong growth this year.
What is happening to your diesel share in Europe?
It is going down. That is the trend.
Are your plug-in hybrids benefiting?
Yes. Plug-in hybrids account for about 15 percent of the sales of models where the technology is offered [models in Volvo's 90- and 60-series model lines].
When will your 48-volt mild hybrids start to arrive?
That will happen in 2019.
What do you think will be the powertrain of choice in the future?
We are slowly but gradually increasing our gasoline engine offer because we strongly believe in gasoline engines with electrification. We are expanding our range with the T6 plug-in hybrid with less horsepower [than the top of the line T8 plug-in hybrid]. A T5 will come in the XC40 with electrification. That is what we are looking at because in the long run we believe the dominant powertrain will be a gasoline engine with electrification. I think by 2025 that 25 percent of our global sales should be plug-in hybrids.
What would you do in response to potential U.S. tariffs? Would you add more local production at your U.S. plant in South Carolina?
The big question is whether there will be tariffs. If they come then we have to look into that. Right now, our plan is to build our S60 midsize sedan there. It is definitely a car for the U.S. The second car will be a big SUV, the next generation of the XC90, which is also a car for the U.S.
What percentage of your parts at the U.S. plant will be sourced locally?
We estimate that 45 percent of our content will be sourced from North America at the start of production.
What are your expectations for the S60 given that sedan sales are falling in the United States?
It has to be targeted at a younger, more dynamic audience. I think our [mid-level] R-Design trim line will be very popular in the S60. That is what we are planning. If you look at the customer base, it is much younger for smaller sedans. It's a really big difference. I think you should expect that with big sedans the customers would be more geared toward our [top-level] Inscription line, which offers a bit more luxury, but I believe the S60 buyers will want something more dynamic.
Will the S60 be added to the Care by Volvo subscription scheme?
Yes, that will be the third car line that we will have with our subscription service after the XC40 and V60.