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Volvos Diminishing Sales: Will the New Strategy Work?

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Published on : Jun 08, 2015

It is no surprise Volvo is on the verge of defeat in the American car market. From a record sales of 139,384 cars in 2004 in continental U.S., sales have dropped almost every year since then, and only last year, it managed to sell 56,366 cars, even though worldwide the company posted record number of sales.

So far, it seems 2015 may even be worse. With unseasoned models, brand image which is not focused, and a very small dealership network, the car maker that once hd a strong foothold is seriously at risk to completely disappear from the American roads.

But Volvo will not abandon without a fight. After being abandoned by Ford at the time of the financial crisis, it was taken over by Zhejiang Geely Holding Group, the deep-rooted parent company of Geely brand, and the company that has a long wished desire to have a foothold as the first successful Chinese auto manufacturer in America.

Although the company has given Volvo enough space to devise an ambitious remodeling project in America, it also anticipates Volvo to be its entryway in the American car market. At the core of Geely-Volvo’s strategy is a bold dual invasion plan of the American car market, which will add more Volvos on the U.S. roads as the decade ends which was never seen before.

In the current year, Volvo S60 model will be the first mass produced car in China to reach American showrooms. Although this is an important start, it does not necessarily mean majority of the Volvos in future will be imported from the Eastern subcontinent. After few months of negotiations, the company has signed a deal to construct US$500 million unit in South Carolina, the first plant of the company in North America to open doors in 2018.