Despite a significant sales decline last year and an uncertain future, Volvo CEO Stephen Odell remains optimistic.
Despite owner Ford’s inability to find a buyer for its worst-performing brand (Volvo sales plummeted more than 31 percent last year compared with the year before, slightly worse than the Mercury brand), a continuous sales freefall (Volvo sales were down almost 64 percent in January) and an end to the recession nowhere in sight, Odell says Volvo might be able to survive as its own entity.
“The brand deserves more and is capable of more. Despite our cost cuts, we have a better cycle plan than we have ever had,” Odell said in an interview with Automotive News.
“While the world has changed, and scale is important, you don’t have to be owned to have scale. You can have associations as well.”
Volvo recently won financing from the European Investment Bank with the help of the Swedish government, which will act as a guarantor for a loan to the automaker. The government had said it would back ninety percent of the loan-about $491 million-while Volvo would have to find someone else to back the remaining ten percent. After more recent talks, however, Odell said the government is likely to guarantee the entire loan amount.
Swedish paper Dagens Industri says the loan would be used for funding Volvo’s next round of research and development – if it doesn’t infringe on Europe’s competition legislation.
Ford of Europe CEO says Ford will likely take some time to decide Volvo’s fate. Speaking at the Geneva auto show this week, he told reporters that “In truth, I don’t think this is going to be a quick process, looking at market and economic conditions.”
Volvo is the last luxury automaker Ford retains from its “Premier Auto Group,” which consisted of Aston Martin, Jaguar, Land Rover and Volvo. Though Volvo still has ties to Jaguar and Land Rover, Ford sold the other brands.
The biggest fear in the minds of Volvo executives is the outcome of Saab’s bankruptcy filing. If Saab were to liquidate, it would likely take down several suppliers who only supply to Saab and Volvo.
Source: Automotive News