Hoovey689

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Volvo planning long-wheelbase S60L for Chinese market

Regular readers should be plenty familiar with the trend in the Chinese market towards long-wheelbase versions of the luxury sedans we have here. It's just what high-end customers in the decentralizing economy look for. And European automakers have been only too glad to oblige.

BMW, Audi, Porsche and Infiniti have all recently stretched their existing luxury sedans to lure new buyers in the rapidly developing Chinese market, and now word has it that Volvo is following suit with a long-wheelbase version of the S60.

The Chinese-owned Swedish automaker already produces a stretched version of the S80 in China, but has reportedly found little success. The hope is that the S60 – which for all its positive attributes does not have a particularly spacious rear bench – will plug that gap better in long-wheelbase form.

http://www.autoblog.com/2012/05/15/v...hinese-market/

Hoovey689

iTrader: (16)

no surprise. and in China, its a smart move by an automaker

GS69

Volvo Execs, Owner Geely Clash Over Brand Direction

Safe, solid and understated in a Swedish way, or an aspiring luxury brand eager to pander to a Chinese taste for excess and 'bling': that's the debate causing ripples at the top of Volvo Car Corp., which has been under Chinese ownership since 2010.

A culture clash between Volvo's European management and Zhejiang Geely Holding Group Co., the brand's owner, may have broader implications for corporate China. If Geely prevails in refocusing Volvo on China's premium market, it could chart a course for other Chinese firms with global ambitions.

The Volvo Concept Coupe, unveiled on Tuesday at the Frankfurt auto show, is a sign that Chinese ownership wants to shed Volvo's sober image and grow sales significantly by taking on established luxury brands such as BMW, Daimler's Mercedes-Benz and Audi.

According to 4 people close to Volvo and Geely, the Chinese firm's billionaire owner Li Shufu believes China, where more than 1.2 million premium cars were sold last year, is key to Volvo's future, and will help it hit a target of doubling annual global sales to 800,000 vehicles by 2020.

Volvo's year-on-year sales in China grew by 2-thirds in August to 4,319 cars. January-August sales were up 40 percent to 37,661 cars.

To get to its target, Li, who is chairman of both Geely and Volvo, wants the Swedish carmaker to come up with a large premium sedan aimed at China's newly wealthy who tout their social status with German luxury cars, such as the Audi A8 and BMW 7-Series sedans.

Managers at Volvo are not on the same page. Hakan Samuelsson, CEO since late last year, believes it's too big a risk for Volvo to give up a niche cultivated over decades with a focus on safety and Scandinavian understatement and try to take on German luxury carmakers.

"Volvo will never compete in that segment where customers are expecting to have V12 or V8 engines. Volvos are 4-cylinder and 6-cylinder engine cars," he told reporters in June at a plant opening in the southwestern China city of Chengdu. "Showing off has never been part of the Volvo brand."

A bit of a stretch?

Volvo's management also believes it makes little economic sense to come up with a rival to the BMW 7-Series or Mercedes S-class because the large, rear-wheel drive sedans are costly to develop and Volvo lacks the scale to make a quick return on the investment.

Volvo's compromise to Li is to meet halfway by creating a stretched and more luxurious "China version" of the smaller S80 sedan, currently being redesigned, the insiders said.

"We told Chairman Li we should stay away (from a luxury flagship sedan). It's too long a journey to make with little hope for a quick return," said 1 senior Volvo executive, who asked not to be named as the discussions were private. "We think it's better to spend your money in areas where we can make a difference. We told him that, and I have the feeling he buys into that."

Indeed, Li said at the Chengdu event that he is ready to support Volvo's traditional niche even as it tries to restyle its lineup, including the Concept Coupe, which is a modern take on the Volvo P1800 from the 1960s.

"Future cars I've seen, which designers presented to me, are really appealing," Li said. "I feel very happy and confident this will be a great success."

While Li publicly touts the progress the 2 companies have made in upgrading Volvo's technology -- especially new "scalable" architecture underpinning a range of larger Volvo cars -- 2 people close to Li say he is still trying to nudge Samuelsson to compete with the Audi A8, with a plusher and bigger model he calls the S100.

Sales of high-end cars, particularly in the super-luxury category such as Bentley and Lamborghini, are likely to slow as China's economic growth eases and new political leadership takes aim at lavish spending and graft. But Li still sees growth potential in China's luxury car market, which is expected to overtake the United States as the world's biggest by 2020, with annual sales of around 3 million cars.

Vulgar Volvo?

Li's comments at Chengdu indicate a narrowing of the difference in thinking over how far to go in giving Volvo an up-market make over. Insiders say Li is a big fan of the new styling that design chief Thomas Ingenlath has brought to Volvo.

Samuelsson and his product strategy chief Lex Kerssemakers insist Volvo should stick to its Scandinavian roots, in part because Chinese consumers are changing and no longer seek to flaunt their status through owning a German luxury car. "That shift started in many countries years ago, but you also see it now in China," Kerssemakers said in Chengdu.

Li, though, still believes Volvo needs a flagship head-turner sedan for China, say those familiar with his thinking.

"Show-off people" are the main customer base for luxury cars in the world's biggest autos market, they say. During a weekly conference call with Samuelsson around Chinese New Year, Li again pushed Volvo to develop a large flagship sedan, they said.

He failed, and was "not too happy" after that call, one insider said, as "Hakan (Samuelsson) was not as straightforward as (his CEO predecessor) Stefan Jacoby." While Li wields the power, he "plans to deal with this issue diplomatically," the person said.

"Volvo management says they (ostentatious Chinese consumers)are not our target customers. The problem is, there aren't many people in China today with good taste," said one of those close to Li. "Mistresses love BMWs. Coal mine owners and property developers drive Mercedes. Those rich people like to show off."

Li is expected to attend the Frankfurt show and then head to Gothenburg for a presentation by Volvo management on the brand's future cars. Volvo managers remain confident Li will support the compromise of a stretched S80 to appeal to Chinese drivers.

Michael Xu, a Volvo dealer in Chengdu, said there is a gap in target customer awareness for the Volvo brand versus BMW, Audi and Mercedes, and he would welcome Volvo adding a "very high level" model, priced at 1 million yuan ($163,400).

"That type of model would help build Volvo's brand image ... and boost awareness for the brand," said Xu.