Just how much does it take to revive an iconic premium brand? How does $11 billion sound? That's what Volvo's Chinese owners are spending to give the Swedish company one more shot to make it as a global carmaker.
It's ambitious, but Volvo is spending money on core products built on qualities that have made the brand successful in the past.
It's a make-or-break proposition. Volvo must get it right, as even deep-pocketed parent company Zhejiang Geely Holding Corp. has limits. The money will fund a product blitz with fresh yet authentic Swedish design, improved technology, new engines and, as always, a focus on safety. It's ambitious, but Volvo is spending money on core products built on qualities that have made the brand successful in the past.
The 2015 XC90 will be the first vehicle to roll off the assembly line as a result of these efforts. As our Noah Joseph reported from the reveal in Sweden this week, the crossover embodies all of Volvo's aspirations. It's based on the company's Scalable Product Architecture that will be used for all of the company's models in North America. It draws power from the Drive-E engine series, including a 2.0-liter four-cylinder that makes 316 horsepower thanks to turbocharging and supercharging, and a plug-in hybrid variant that also uses both forced-induction systems to pump out 400 hp.
Related Gallery2015 Volvo XC90
"There is no denying that this is an exceptionally important vehicle for Volvo," Ian Fletcher, an analyst with IHS Automotive, wrote in a research note. "It also underlines the future expectations of the brand by management and its owner."
"It remains to be seen whether consumers respond well to the brand's new direction." – Ian Fletcher
The XC90 begins its rollout in September, when Volvo starts taking orders for the First Edition, which will be limited to 1,927 units in recognition of Volvo's founding 87 years ago. The XC90 is also the first vehicle developed independently since Volvo was sold by Ford to Geely in 2010.
IHS projects Volvo will sell about 65,000 copies of the XC90 worldwide, with most of the sales in China. Fletcher said the XC90 likely won't match the sales figures of its predecessors in North America due to increased competition from brands like Lexus and Cadillac, as well as traditional stalwarts BMW and Mercedes-Benz.
"It remains to be seen whether consumers respond well to the brand's new direction," Fletcher said. "If it is successful, it could bode well for its further new launches in the future."
Volvo is expecting sales to increase five percent globally this year, as some of its existing models – which have been refreshed – gain traction in the marketplace. For a more significant leap, the XC90 and its upcoming siblings, will have to be winners.
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