Volvo creates U.S. and Canada division

Volvo Cars is restructuring its Americas business and spinning the U.S. and Canada markets into a separate unit.

Anders Gustafsson, 54, head of Volvo Cars Americas and CEO of Volvo Car USA, will give up his responsibilities March 1, three people briefed on the matter told Automotive News.

Michael Cottone, a 21-year Volvo veteran and Western Region vice president, will take over the top job in the U.S. and Canada. Cottone, 43, will report to a Volvo Cars commercial executive, not to CEO Jim Rowan.

It's unclear if Gustafsson plans to continue with Volvo or return to Sweden.

Volvo Car USA confirmed the reorganization to Automotive News.

"To support and ensure a strong focus on Volvo Cars' ambitious goals for growth, full electrification and an omnichannel customer experience, the Americas region structure will evolve, creating a dedicated organization for the USA & Canada," a spokesman said in an email.

Gustafsson's exit surprised Volvo's retailers, who appreciated the executive's straight-shooter approach.

"The dealers are sick about it; they don't understand it," a dealer said. "In your lifetime, you come across very few charismatic leaders that can lead and deliver, and [Gustafsson] is one of them."

Cottone's elevation comes at a critical juncture for the business.

As Volvo pivots to an all-electric brand by 2030 and experiments with a new sales model, Cottone faces a dealer network still figuring out what the new strategy means for their business.

The Swedish automaker has laid out a strategy to sell battery-powered models online through volvocars.com and dealer websites — a prospect that has made some retailers nervous.

While the pandemic and supply shortages have been good for retailer margins, the new year brings change. Cottone and his team will have to navigate economic headwinds as inflation and interest rates bite into demand for big-ticket luxury vehicles.

In 2021, Volvo Cars said it planned to sell its battery-electric vehicles through an online model and deliver them to dealerships rather than having retailers stock hundreds of new cars.

Meanwhile, Cottone must execute on Volvo's aggressive product rollout while maintaining the brand's U.S. market momentum.

Cottone began his career with Volvo in 2001 and has held corporate, regional and international positions, including brand manager for the XC60 and product strategy management.

Cottone "understands the retail business," said a dealer who asked not to be identified. "He is focused on the guest experience and the customer."

But Cottone has big shoes to fill.

"He has the potential to be a good leader, but at that level, it's a quantum leap," the retailer said.

The change at Volvo's U.S. headquarters in Mahwah, N.J., comes amid a leadership shuffle in Gothenburg.

Last year, Volvo Cars CEO Hakan Samuelsson retired, setting off a chain reaction. Several Volvo veterans were in contention for the CEO job. But in a surprise move, the board picked Rowan, a former Dyson top executive, for the job.

Rowan has briskly rearranged his cabinet, naming two deputy CEOs and moving four of the 11 executives — including Gustafsson —  off the automaker’s highest management tier.

A source said Gustafsson was offered one of the deputy CEO roles but didn't want to return to Sweden.

Meanwhile, one veteran Volvo exec — and onetime presumed front-runner to succeed Samuelsson for the CEO job — has stepped down. Henrik Green, who previously served as CTO, announced on LinkedIn earlier this month that he is leaving the automaker.

Gustafsson took over the reins of the key U.S. market in 2017 at the dawn of a sales resurgence for Volvo. In his five years at the helm, Gustafsson oversaw the opening of Volvo's U.S. assembly plant and steered the brand through the upheaval of the pandemic. The brand's U.S. annual sales grew 25 percent under his watch.

"We like Mike and will support him, but there is no rational reason why Anders is leaving," a dealer said.

Volvo and retail run in Gustafsson's veins.

He has had a connection with the Volvo brand since age 14, washing cars at the Volvo dealership his family has run in southern Sweden for more than four decades. Gustafsson, who had been Hertz Sweden CEO, joined Volvo in 2009, taking over the automaker's Swedish market management.

Gustafsson's retail background endeared him to the U.S. dealer network.

"The dealers genuinely liked the guy," a retailer said. "Anders was entrenched and highly respected in Sweden."

But the relationship has been tested in recent years.

Following a dealer uprising over the online sales strategy, Gustafsson went on a six-city roadshow in April 2021 to assure dealers they weren't being marginalized.

Gustafsson also dealt with pushback on Volvo's other retail experiment — its vehicle subscription program. Unlike many automakers who abandoned the sales model, Volvo adapted its subscription program, which continues to expand into new markets.