Fredrik Arp, the president and CEO of Volvo Car Corporation, is not affected by the intensifying rumors about the potential sale of the Swedish automaker along with its Premier Automotive Group (PAG) siblings - Jaguar and Land Rover. Amid rumors, the automaker is outlining growth plans to boost its global sales.
When asked if Volvo had a long-term future with Ford, he replied "you should ask Ford about that. I am not dealing with hypothesis, I am focusing on operating and running Volvo Cars and we are doing very fine this year."
"The reason I reject going into this speculation and discussion is that it is not in the interests of Volvo Car stakeholders, customers, dealers or anybody else, and [because] I do not own the business. However, as we have consistently been saying since last year, Ford has been considering a number of strategic options for all of our operations, as any responsible business should do," the Wall Street Journal quoted Arp as saying.
Currently, the Gothenburg-based car manufacturer is in the middle of a dual model launch programme with the imminent launch of the new V70 and XC70 - sales of estate cars represented over one-third of the brand's global sales in 2006.
The new Volvo V70, launched last February, was developed to be a slightly more up-market than its predecessor, but remains the same size. The car features unique styling sharing little externally with other Volvos. The equipment used will be far different from . The V70 shares the Ford EUCD platform and much of the interior with the new S80. It is equipped with a 3.2l straight-six, a 3.0l turbo straight-six, a light-pressure turbo 2.5l straight-five, and two 2.4l straight-five diesel engines.
Arp was surprised to know that General Motors Corp. was planning to enhance Saab's profitability by decreasing output and zeroing in on cost reduction. From his standpoint, the CEO explained that Volvo was in the lucky situation of driving growth, global sales grew eight percent year-on-year (y/y) in the first five months of 2007 and the company is using its current installed capacity more efficiently, meaning that there was no need to expand production in Europe or anywhere else in the medium term.
The Swedish automaker has a total annual production capacity of around 580,000 units worldwide, of which it produces about 450,000 units annually and wants to concentrate on making further efficiency gains to bolster its growth ambitions. By 2010, Volvo aims to sell 600,000 units around the globe. The target will be supported by Volvo's Sweden, Belgium and China plants.
Volvo confirmed to Global Insight that the all-new XC60 crossover will come out during the second half of 2008 and development was according to plan. It means that the production version will be very close to the concept. "Beyond the XC60 we have not any firm thoughts and I will not comment on speculation around the possible consolidation of the S40 and S60 into one model. We think about all sorts of model developments and we see the segment created by the Mercedes B-class as very interesting, at the same time we are thinking whether the XC60 will have a little brother that could be categorized as a Multi-Activity Vehicle," Arp concluded.
Volvo does not intend to produce cars in the United States, its largest market, despite the weak US currency, Automotive News Europe quoted Arp as saying. The combination of a weak currency and overcapacity prevents North American OEMs from passing on raw material price hikes, said Arp. This makes setting up a plant and assembling vehicles in the US expensive, the report stated.
