Volvo plans safety-first SUV in revamp under China ownership

Elisabeth Behrmann and Niklas Magnusson
Bloomberg News

Volvo Car Group is designing its first model under the ownership of Zhejiang Geely Holding Group Co. with an emphasis on automotive safety to revive worldwide sales.

The Swedish automaker, which introduced the three-point seat belt as a standard fitting in 1959, will load its new XC90 sport utility vehicle with crash-avoidance technology and accessories such as a crystal gear-shift lever by glassmaker Orrefors and a proprietary touch screen compatible with Apple and Android devices. The model is scheduled for its first public presentation on Aug. 26 and enters showrooms next year.

“I hope that through this product, it will allow Volvo to once again find self-confidence,” Chinese billionaire Li Shufu, chairman of both Volvo Cars and Geely, said last month in an interview in Hangzhou, China. “To find once again, the territory that belonged to Volvo in the ’50s and ’60s, and to once again possess the market share it ought to possess.”

The XC90, replacing a version built since 2002, is the initial vehicle in Volvo’s four-year, $11 billion project to produce a broad range of models on a single manufacturing line offering a selection of electric-power variants and safety components.

The automaker is working on a separate setup with Hangzhou-based Geely for a small-car range that will use some elements of the technology.

“This car is Geely and Volvo’s first shot after the merger so it has to be loud and heard widely,” said Han Weiqi, a Shanghai-based analyst at CSC International Holdings. “It also gives a hint on the future of Volvo under Geely’s ownership, which is to consolidate its position as a premium brand.”

Ford Motor Co. bought the company for $6.45 billion in 1999 from Volvo AB, which had decided to focus on manufacturing trucks and construction equipment, and the two Swedish vehicle producers no longer have equity ties.

Ford sold Volvo Cars to Geely for $1.8 billion in 2010 as the Dearborn company got rid of premium brands amid a streamlining project after the global recession.

The XC90 will be equipped with a more vertical grille than its predecessor, as well as headlamps and indicator lights embedded in hammer-shaped fixtures. It will come with as much as 400 horsepower with an optional electric motor add-on.

Safety features include systems to sense other cars’ distance and speed at an intersection, prevent the SUV from straying from its lane and tighten seat belts in the event it leaves the road.

Volvo Cars is betting on the model helping the company reach annual sales of 800,000 vehicles and an operating margin of 8 percent of revenue, in line with premium-auto competitors, by 2020.

The manufacturer sold 427,840 cars in 2013.