Discussing Volvo's Recent Past and Near Future with Lex Kerssemakers, Volvo Senior VP
1968 Amazon-owning executive sees a place for driving in the autonomous future
Alexander "Lex" Kerssemakers is a Dutchman working for a Swedish automaker once owned by Ford and now by a Chinese holding company. Of medium stature, Kerssemakers, 57, looks physically nimble, and in an interview, he proves himself intellectually nimble, emphatic, and droll. Volvo insiders give him a large share of credit for making the brand formidable once again. Its impressive range of cars and crossovers is in nearly every important segment. Now might even be the time to start dreaming of halo vehicles.
AUTOMOBILE MAGAZINE: After Volvo's near-comatose state of a few years ago, how sweet is it to be here with lots of news and all these great new products?
LEX KERSSEMAKERS: You refer to the fact that some people wrote that Volvo would not exist any more in the United States.
AM: Things got very slow.
LK: We have been out of sight, out of mind, especially in the United States between 2008 and 2015. But of course we knew that we would never leave the United States. Of course we knew that Volvo would never disappear. But in all fairness we needed strong products to prove our faith in the brand. We worked between 2010 and 2015 on the SPA platform and the new engines and the new tophat. So we are extremely happy that we are now in this turnaround in the United States. We started in 2015. The retailers are investing again. They have faith in us.
Last year we grew by 17 percent. This year we will close again with year-over-year growth. You don't see it yet in the numbers because we had some supply issues in the first six months. But I'm convinced now, with sufficient XC90s, sufficient XC60s, that we will pick up the momentum again from last year and show growth and continue. We are definitely not there yet to celebrate a victory because it takes five years. We said to our retailers it takes five years to get reestablished again in the United States. If I look at the faith our retailers have in the future, that tells it all. They are our partners. They have to invest also. And they do.
AM: Can we call Volvo's electrification strategy "Take a Bite out of Tesla"?
LK: No. We started this journey, our drivetrain strategy, in 2008, 2009. We decided we only go for four-cylinder turbos. Later on we added the three-cylinder, which we will launch soon. We combined that with any sort of electrification, always with the long-term vision that electrified cars, or fully electric vehicles, will be the future in the automotive industry. What the timing is—if it's 2020 or 2025—that depends on a lot of factors. And we see that. It goes with bumps.
What we said is that, from '19, we only launch new cars that have engines with any sort of electrification. So combustion engines with an electric motor that increases the performance or fuel efficiency, plug-in hybrids as we currently have, and full electric cars. It was somewhat misunderstood because some people thought we are going to let go of combustion engines from 2019. But that is a little bit too early for an established brand like Volvo. And also when you sell to volumes we have. But we strongly believe in electrification, as some of our competitors do—like Tesla. So we're on the same path. But we came from a different direction. So we take it in steps. They took it in one step. I think we have the same mission and that is to increase the number of electrified cars because that is the future.
AM: Does it really make a lot of sense to push hard today for hybrids and EVs when that market segment is shrinking in the United States?
LK: That's why we take it in steps. In some countries it goes faster than in other countries. And of course we see that there have never been more cars that are electrified and the market share remains very flat. We see that. But that does not mean that we abandon our long-term belief. And that's why we have regular combustion engines combined with electrification. So I'm very comfortable that we have the right mix to fulfill the needs at different times and different trends.
AM: Who else should be worried about competition from Volvo?
LK: What I think, what we are showing now, is we have a very strong brand with a long heritage. We see that now in the United States despite the fact that we have been away for a long time. People jump on Volvo because they like Volvo. So that's rather solid. It's awareness that is the issue, not the brand as such, the product awareness. We have shown with XC90—there are very few cars that have won more awards—that we can go our own route with four-cylinder turbo engines. That was heavily questioned three, four years ago. How can a big SUV be powered by a four-cylinder turbo?
We have beautifully designed, high-quality cars and probably some of our competitors did not expect that Volvo could make that journey. I think we have shown our colleagues that we are back with very strong products: XC90, XC60, XC40 coming at the end of the year. So in addition to that we are full on the SUV trends. We will offer three brand-new SUVs with the most modern powertrains in a period of two and a half years when SUVs are booming. I think we make our mark. That's what we want to do. How people react upon it, we have to see.
AM: There's skepticism that perhaps some people would choose a Volvo today as a way of expressing, "Hey, I'm getting great Scandinavian design and I'm getting my green scorecard punched."
LK: You mean it's a socially responsible brand? I'm very, very, very happy to play that role because there are many, many people nowadays who take a stand on certain issues and they want to express that via a car. We have always been very clear where Volvo stands. We want to make the safest car in the world, but they should be very nice to drive, good looking, but also environmental friendly. I'm happy to play that role. Very happy.
AM: Eliminating car accident deaths is a noble goal. How is the Vision 2020 program coming along?
LK: Very well. Swedish engineers do not make statements like that very easy. It is very clear that we do not manage that with only passive safety, as we had in the past. Autonomous drive is an essential ingredient to take away all the mistakes because 90-percent plus of the accidents are caused by human mistakes. We need to take out those mistakes. Otherwise, we never reach our vision. And that's one of the reasons why we are focusing so strong on autonomous drive. Yes, it's going well. That said, autonomous drive is a crucial ingredient in it.
AM: You've partnered with Uber on autonomous driving. Has turmoil there caused any disruption?
LK: Nope. We continue all the work as we agreed with them. There is no change in direction at all.
AM: How would you sell an Automobile Magazine reader on Concept 26?
LK: Life is about choices. And life is not black and white. So if we talk about autonomous drive, like in Concept 26, we talk about the opportunity to drive autonomous. We are not talking about moving from A to B in an autonomous way. We build good-looking, safe, nice-to-drive cars. We will continue to do that. The car has a steering wheel. You decide when you lean back. The car is as the car is. But when you decide to lean back, we want to create an environment that is as comforting as possible.
There is no reason for any enthusiast—and I am an enthusiast—to believe that autonomous drive will take away driving pleasure, because it doesn't—you decide. You decide when you switch on the TV at home, when you want to watch TV, or Netflix, or whatever. You decide when you drive autonomously. But what we believe is that many people will decide when they drive in the surroundings of New York or Los Angeles, because there is no driving pleasure any more. And that is where autonomous drive comes into play.
AM: When will we drive the first U.S.-made Volvo?
LK: End of next year. Because in end of quarter three, we will launch the S60, produced in Charleston, and then the car is released. So a year from now as we speak.
AM: What will Volvo have for those of us who loved the P1800?
LK: I can't comment on that.
AM: Yes, you can.
LK: No, I can't. I have nothing to add.
AM: Have you ever imagined a Volvo equivalent of the Mercedes-Benz G-Wagen?
LK: At the moment we focus on our core business. And that's why I can't answer on the P1800. We have done so much: new platforms, engines, tophat, refreshment of all our cars in three, four years. We needed to get our basics in order, for the reasons we talked about before. We are now covering 80, 90 percent of the automotive market with small cars, medium-size, and bigger cars. Who knows in the future when we are into the next phase.
AM: The question was have you ever imagined.
LK: I was a product planner. We dream about cars. But it stayed with imagination.
AM: If you were to drive away from here in a car from your collection, which would it be?
LK: Recently I bought a 1968 Amazon station wagon on Bring a Trailer, so I would take the Amazon station wagon. It's a totally restored car, 2.0-liter engine. They made a GT version out of it, tuned the engine a little bit, nice sound, lowered—very good appearance. It's just fun. It's just fun! I haven't used it too much because the PR team is constantly using it.