Volvo to Cut Down its U.S. Lineup, V50 Among the First to go

With its U.S. sales steadily declining for 7 years now, Volvo has no choice but to radically rethink its strategy. The Swedish automaker is currently offering nine models in the States or about as many as Volkswagen does, but it sold almost five times fewer cars than the Germans in 2010.

Consequently, the Swedish brand, which is now owned by China's Geely, has decided to significantly reduce the number of models in its North American lineup and concentrate on best-selling vehicles in an effort to increase sales.

“Five or six is probably a good number”, said Doug Speck, head of Volvo’s operations in the U.S., in a telephone interview for Bloomberg. “We have to focus on the key segments with significant volume potential”.

Mr. Speck confirmed that the V50 estate is sure to go, although didn’t specify exactly when, saying that dealers will be notified first. The manufacturer hasn’t decided yet which other models will be phased out, but it will definitely keep the S60 sedan and the XC60 and XC90 crossovers, he added.

Volvo will also try to boost sales with more advertising and expects “double-digit” percentage growth in the U.S in 2011.

As for the near future, Mr. Speck said that Volvo will introduce hybrids and all-electric cars, but declined to say if it will bring diesels to America.

By Csaba Daradics

Source: Bloomberg