Frankfurt show: Volvo moots V40 diversification

VOLVO will look to spin a proper small SUV and potentially a small sedan off its next-generation, in-house ‘CMA’ V40 architecture due a few years down the track.

While the company says growth in China and the US with re-generations of its current models, starting with a new XC90 due in 12 months time, is key to its ambitious growth plans, an expansion into other segments is also being looked at closely.

The Chinese-owned, Swedish based company is on record as wanting to roughly double its current volumes to 800,000 units per annum by 2020. It is understood Volvo’s entire range will be turned over or substantially facelifted within three years.

Volvo Cars CEO Hakan Samuelsson said in an interview at this week’s Frankfurt motor show that a broader range of V40 derivations to compete with rivals such the Benz A-Class, GLA and CLA triplets, was firmly on the table.

“First step is replacing all the things we have and then I can say if we should have one more car it’s probably a small SUV. It’s on the CMA wish list. The market is moving in that direction with more small premium cars, and we have to be there,” he said.

“We have V40 but that’s only a hatchback. You could imagine a small SUV or small sedan version,” he said.

Volvo just launched the V40 Cross Country, a jacked-up version of the existing V40 bodystyle. It is understood the potential future car - perhaps called the ‘XC40’ - Mr Samuelsson referred to would be a more traditional SUV-style of car a la the Audi Q3, BMW X1 or Mercedes GLA.

Meantime, Mr Samuelsson also said the company would look to expand its production scale by sharing the aforementioned next-generation V40 componentry with Chinese parent company Geely.

The current, eighteen-month-old V40 is the final Ford-based Volvo. An opportunity to share components with its Chinese parent would give Volvo valuable economy of scale, thereby boosting profitability.

Geely CEO Gui Sheng Yue recently told media the company was moving down the path of joint development with its Volvo subsidiary, which it bought for $1.2 billion euros in 2010. He said the first model could make it to market within the space of a few years.

Intriguingly, Mr Samuelsson this week drew an analogy between Volkswagen or Audi and the VW Group’s budget Czech subsidiary Skoda to describe this joint-venture with Geely, albeit with the roles reversed: in this case, the less prestigious brand owns for the more prestigious one.

“If you go to the next V40… that will be shared in other direction, it’s more like Audi and Skoda, where we make a small Volvo and Geely makes a small Geely that will play the role of Skoda,” he said.

“The two cars will be very different, appeal to different customers, but be equal enough to share components, maybe the same gearbox, engine and suspension. It will be a no compromise platform, and increased volume from Geely will be all the better.”

Asked whether this could hurt Volvo’s brand reputation, Mr Samuelsson responded in the negative.

“I don’t think VW has any plan with arguing in this respect, no problem with Audi, VW and Skoda, but there’s a lot of common parts behind the panels. I don’t think customers care,” he said.

It is expected the V40/Geely twins will both be made in China, with the Volvo version also to be made in Sweden. Volvo will produce joint-venture cars for China in China from later this year, and exports to the West - even Australia - from that plant are on the cards for the medium-term, according to Mr Samuelsson.

“Volvo will be made in China from late this year. Next step is to look within that region, mainland Asia, but I would not exclude Australia, although plans are not concrete right now and it’s too early at the moment. Well within a decade,” he said.

Volvo used the Frankfurt show to stage the premiere of its big and beautiful hybrid Concept Coupe design study - the first in a series of three concepts the company plans to unveil soon to make clear its future design direction.

New senior vice-president of design Thomas Ingenlath said on the Volvo stand that the company’s new-generation of cars would inherit elements of the Coupe’s design such as the broad shoulder-line and grille.