By all accounts, Volvo has been one of the most forward-thinking automakers responding to the shift in consumer demand.
The Chinese-owned, Sweden-founded marque has made significant strides toward efficiency, electric vehicles, and continued progress in its trademark safety and designs.
This is all led by the XC40 P8 Recharge, now taking pre-orders for a fall release, which is the company’s first long-range EV offering and the first piece of a goal to reach 50% battery-electric sales by 2025. (It projects the rest of sales will be hybrids and follows a broader goal towards carbon neutrality for all operations by 2040).
Anders Gustafsson has led all Americas operations for Volvo since 2017 and has spearheaded the company’s strategy and response to the Covid-19 pandemic. Like many automakers, Volvo stores remained open for auto repair services deemed “essential,” but dealers pivoted to largely digital operations, which coincided with a dramatic rise in the use of the Volvo Valet app, where current owners can schedule maintenance for their vehicle and new owners can manage the delivery process.
Penta caught up with Gustafsson, 51, about the company’s strategy as restrictions ease and specific plans regarding the XC40 launch later this year.
PENTA: What worries you now about the U.S. auto market that wasn’t on your mind at the start of 2020?
Anders Gustafsson: I don’t know that we’re worried in the traditional sense. We’ve been through an emotional roller coaster of challenges and successes and I know that we don’t know everything. Things will continue to be somewhat troublesome, but it won’t be so ugly and we can handle it in good time.
How do companies like Volvo stay competitive post-coronavirus?
First, from Volvo’s perspective, we’re not out of the coronavirus situation yet. I’m responsible for 21 countries (he’s also SVP of Volvo Americas), and Brazil and Mexico are going through what the U.S. went through eight weeks ago. We need to be very true to our brand and values, being a safety-focused and human-centric company. If we keep to those, our consumers will stay with us.
Our last few weeks have been extremely successful, with May sales only 2.5% below the same period last year. We’re working to be competitive in a different way. Our customers should feel safe doing business with us and technology is getting more important. We’re making investments in digitization and focusing on what consumers are asking for: easier digital tools.
Heading out of the crisis, do you think you’ll be competing for fewer consumers and less spending?
Volvo’s customers typically have a very good financial situation and are very loyal and that helps us in this climate. We had such a successful May because we have a great customer portfolio. When you go through a crisis—those late evenings and early mornings—you reflect on your family and health, what’s most important. Our electrification message and investment is what matters to our consumers. It’s a strategy that serves to take care of those worries and point to why we’re doing well.
Once the XC40 Recharge is released, are there certain metrics or markers you hope to reach to define the vehicle as a success? How many orders have been placed for the XC40 so far?
With a full-electric or partial-electric vehicle, there’s always very high interest at launch, then things slow down after six to eight months. To sustain interest, we’re working on a slow (product) ramp-up, rather than rocketing up quickly ( Editor’s note: Volvo declined to offer specific initial order numbers ). We know that if you drive one of our Recharge cars, you’re likely charging it 75% at home and charging it based on your driving patterns. You need to have strong values and offers from a product point of view.
In the beginning, we didn’t want to have too many cars in the U.S. We’re working on a “second wave” of interest, targeting 21 specific ZIP Codes and markets across the country, mostly focused on the West Coast. We’re putting a unique team out there to focus on product specification with educated technicians, parts distribution and marketing activities.
With the recent Volvo Valet program, is there any early data or note about how the program is doing, and who is using it?
We bought tech company Luxe a couple of years ago (a digital valet and concierge platform, which Volvo transitioned to Volvo Valet and formally launched in March). It’s been a slow ramp up, but a great success. Before the pandemic, probably 20 or 30 dealers were using it, but now we’re getting close to 200 with more than 10,000 transactions completed through the app, now it’s more.
While we as individuals have been through a tough time, our dealers have adjusted, running their operations from home, too. They’ve integrated Volvo Valet into normal operations. The whole range of our consumer (base) is using the app. (For them) it’s not about saving time, it’s about staying safe.