New CEO Looks to Rework Volvo's Lineup, May Add Two Small Vehicles

Volvo's new CEO Stefan Jacoby is planning the automaker's future after Ford ownership as it plans to rework its portfolio in advance of vehicle refreshes. Not only is Volvo planning to drop several models, it may add two small vehicles to help it better compete with luxury marques like BMW.

Aiming its sights squarely at BMW, Chinese-owned Volvo is reconsidering its current lineup and planning for future offerings. Volvo's smallest sedan, the S40, is scheduled to be dropped from the automaker's portfolio, deemed too close in size to the redesigned S60 sedan. A sedan closer in size to BMW's 1 Series will take its place, allowing the lineup plenty of room to grow.

Volvo also recently announced that it will no longer sell wagons in the United States, citing a declining market for luxury wagons over the last few years. The 2011 model year marks the last year for its V70, with the smaller V50 scheduled to be discontinued (along with the S40) in two years.

In their place, Volvo is considering a small SUV, comparable to the BMW X1. Volvo believes the small luxury SUV segment is growing and wants in on the action.

Volvo's larger S80 and XC90 are both due for redesigns in two years, and may share a platform. The automaker is aiming to simplify its operations, and is considering the possibly of placing entire lineup on two platforms: one for large and one for mid-sized vehicles.

"The key to any car business is you can't afford to have too many platforms and need cost efficiencies to compete," Doug Speck, CEO of Volvo North America told Automotive News.

Is BMW the right target for Volvo? Let us know what you think in the comments section below.

Source: Automotive News (Subscription required)

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