Volvo's U.S. Sales Are Falling; Company Still Plans to Grow U.S. Sales 80 Percent by 2020

Timothy Cain
by Timothy Cain

Volvo has lofty expectations for its presence in the U.S. luxury car market, but the Chinese-owned Swedish automaker is going to rely on a new boss to dramatically elevate the brand’s U.S. volume over the next three years.

Lex Kerssemakers, a Dutchman who’s been in charge of Volvo’s North American region for nearly three years, is being shuffled into the equivalent position as Volvo Cars’ senior vice president for Europe, Middle East, and Africa. It’s essentially a straight-up trade: Anders Gustaffson moves over from his role as senior vice president for Europe/Middle East/Africa to inherit Kerssemakers old job, according to Automotive News.

The new boss overseeing Volvo’s U.S. operations brings a retail-oriented perspective, having held his first job as a 14-year-old at his parents’ Volvo dealer in Sweden. Anders Gustaffson also held a role as CEO of Hertz in Sweden and was the leader of Volvo in its home market, as well.

Gustaffson’s predecessor —also his successor — hasn’t shied away from placing a large amount of pressure on Gustaffson’s shoulders. Through the first seven months of 2017, Volvo’s U.S. sales are down 9 percent, diving three times faster than the industry at large. Yet according to Kerssemakers, “Volvo should sell 150,000 vehicles a year in the U.S. [by 2020],” Automotive News reports.

That’s an 80-percent jump in the next three years. Get to work, Mr. Gustafsson.

The task should be made easier thanks to improved supply stemming from a South Carolina assembly plant that’s due to open in 2018. Moreover, Volvo has shown in the recent past the ability to quickly elevate U.S. sales thanks to a single new model.

Blessed by the second-gen XC90’s late 2015 advent, Volvo sales were 47-percent higher in 2016 than in 2014.

Now Volvo directs its gaze toward the second-gen XC60, which will be responsible for rapidly turning up the wick. Volvo has never managed to sell more than 27,000 XC60s in a single calendar year in the U.S.; topping out at 26,134 in 2015 before losing 22 percent of that volume last year. A handful of competitors have proven capable of selling twice as frequently.

But the gorgeous new XC60, priced from $42,495 (including delivery) and from $57,695 in T8 Inscription form, won’t be left to its own devices. Volvo is feeling very confident about its upcoming XC40, which is designed to challenge the BMW X1, Mercedes-Benz GLA, Audi Q3, and the Benz-based Infiniti QX30.

Yet many new Volvo introductions stand little chance of propelling Volvo to its goal of a record 150,000 sales in 2020. “We said, ‘Let’s try the online exercise’; we just wanted to see how it works,” Kerssemakers says, speaking of the V90 wagon’s special-order status. “We can’t just continue to push cars at our retailers.”

Volvo had reported 61 U.S. V90 sales through the end of July. Indeed, Volvo’s cars are a rejected species overall. Sales plunged 37 percent in July and Volvo’s two utility vehicles generated more than two-thirds of the brand’s sales.

Volvo sold nearly 83,000 new vehicles in the U.S. in 2016 — and is on track for 75,000 in 2017 — but hopes to sell 150,000. Incoming senior vice president Anders Gustafsson must surely find the task daunting. But based on an interview earlier this year with Automotive News Europe, Volvo’s Gustafsson takes solace in one belief.

“Volvo has tried so many times to reach the premium level,” Gustafsson says, “and now it is there.”

[Images: Volvo]

Timothy Cain is a contributing analyst at The Truth About Cars and and the founder and former editor of Follow on Twitter @timcaincars.

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  • Mandalorian Mandalorian on Aug 29, 2017

    In terms of the US, I think we hit peak Volvo under Ford ownership in the early 00s. Its been a decline ever since then. I honestly don't think in the era of cheap gas the Geely 4-pot lineup is going to be a hit. A Tahoe or Yukon Denali costs as much as a well-equipped XC90 and has twice as many cylinders. An Acura MDX is substantially cheaper and provides 97% of the same experience.

  • Steve Jacobs Steve Jacobs on Aug 30, 2017

    Given how thin their dealership network currently is, I can't see this happening. I live in central California and the two local dealers are no more. This 2 county area is well over a million and the nearest dealer is 47 miles away per the volvo website. Given its less than stellar reliability, they'll never sell around here.

  • Mike Some Evs are hitting their 3 year lease residual values in 6 months.
  • Tassos Jong-iL I am just here for the beer! (did I say it right?)
  • El scotto Tim, to be tactful I think a great many of us would like a transcript of TTAC's podcast. 90 minutes is just too long for most of us to listen. -evil El Scotto kicking in- The blog at best provides amusement, 90 minutes is just too much. Way too much.
  • TooManyCars VoGhost; I was referring more to the Canadian context, but the same graft is occurring in the US of A and Europe. Political affiliation appears to be irrelevant.
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