Next Volvo S60/V60 under a cloud for Aus

THE next-generation Volvo S60 and V60 mid-size sedan and wagon twins may not make it to Australian showrooms, with the car-maker’s local boss confirming that low-volume models in the line-up are on notice as it focuses on its SUV line-up.

Volvo’s BMW 3 Series and Mercedes-Benz C-Class rival will be revealed next year and go on sale in Europe later in the year, but a replacement for the existing S60/V60 that dates back to late 2010 is uncertain.

Speaking with GoAuto at the Volvo Ocean Race in Melbourne last week, Volvo Car Australia acting managing director Stephen Connor said the company would not introduce cars to the market that would not sell in sustainable numbers and highlighted the S60/V60 as models that were on notice in Australia.

“We’re just going into runout phase for S60,” he said. “There’s a new S60 and a V60 coming through next year, which will come out in Europe. We haven’t decided if we’re going to take it as yet. We might, but … our product strategy going forward will be more based around what is our customer’s want in this market as opposed to, ‘We’ve got a lovely car, can we fit it into the market?’ We’re turning that mix around a little bit.

“There’s no point bringing a car into Australia if you’re going to sell two or three a month, or we do it at the cost of huge profit.”

Mr Connor admitted that Volvo’s current model line-up was too big and said it was not possible for a company of its size to play in every segment in Australia.

“You’ve got to play to your strengths and that’s one thing I don’t think we’ve done particularly well in Australia. We’re just too thin. Ten model line-up with 70 manufacturers in Australia. We’re trying to compete in every segment and we can’t.”

Sales of the S60/V60 in Australia have dropped off in recent years, with registrations of the S60 sedan halving in 2016 compared with its 2015 haul, while the November year-to-date sales are off by 28.2 per cent over the first 11 months of 2016.

The S60/V60 are now the oldest models in the Volvo line-up, following the arrival of new-generation versions of the XC90, XC60 and S90/V90 Cross Country in the past two years.

Next-gen S60/V60’s will be based on the same Scalable Product Architecture (SPA) platform as the aforementioned models and will share many of those model’s powertrains.

Mr Connor said Volvo Car Australia’s new strategy will be to focus more on models that are expected to sell in higher numbers, specifically SUVs, but added that some other future Volvo models could eventually be added to the line-up down the track.

“I think one of our biggest issues is that we’ve taken too much product. We’ve tried to spread all of our customers across 10 different model lines. Now … we’re one per cent market share (globally) and in Australia we’re .45 per cent market share. Why don’t we hone in on what we’re good at and focus our customers on what we’re really good at? That’s V40, XC60, XC40, XC90. That will be our strategy as we go forward. We won’t take all the product that’s coming through.

“We will make sure that we take product that we know that we can sell and will work for us in Australia. At the moment that’s the biggest problem, we’re spread too thin and we don’t say enough about who we are and what we can do.

“That’s the change in product strategy as we go forward. But as we grow and we mature, then absolutely we start to take the new product as and when it comes through. But there’s no point taking a car if it only delivers 10 cars a month, so we’ve got to do in the right way.”

Despite the slow sales of the S90 large sedan that launched in late 2016, and its V90 Cross Country wagon sibling, Mr Connor said the company was committed to offering the 5 Series rival as a range flagship.

“I think we’re committed to the S90 for two reasons. One, it’s a halo car for us in Australia and we need that halo effect because it’s a very important segment, but our volume aspirations will be relative to that market as well.”

To the end of November 2017, Volvo has found 53 homes for the S90 sedan and 37 for the V90 Cross Country, while the BMW 5 Series has recorded 1183 sales in the same period.