Volvo to Increase Leasing

By | November 13, 2013
In order to survive in the United States, Volvo needs to increase the amount of leases it offers, as new models won't arrive until late 2014. With a new executive team, Volvo has a solid plan outlined to tackle the nearly 10 year sales dive. Under the leadership of Volvo's new North American president and CEO Tony Nicolosi, the company has put into motion a five-point plan to strengthen the company. Before he earned his position, Nicolosi served as the interim president and CEO last month, managing to form Volvo Car Financial Services in the process. Roughly half of all luxury brand purchases are leases, and looking at Volvo's numbers, the Swedish automaker falls short of its major competitors. "We have to be better in lease. I mean the market, if you like it or not, half of the market is lease," said Volvo CEO Hakan Samuelsson at a meeting with Volvo dealers.
With the edition of this plan to bring in more sales, Volvo has also increased its goal to sell 450,000 units globally per year by 2020 to a much higher 800,000. U.S. sales are expected to climb back up to 130,000, while China, Volvo's largest market, is expected to sell roughly 200,000 units a year. The five-point plan will implement new powertrains and vehicles, as well as more marketing by a new ad agency. The initial step will be in launching the redesigned XC90, which is the key vehicle in an $11 billion investment. If Volvo's plan backfires, the automaker will have to make some tough decisions. Most of the 308 franchises and dealerships fail to bring in a profit, and sales continue to drop for the company. Source: Automotive News (Subscription Required)