Geely Boss Li Shufu mentioned just hours after the announcement of the Chinese automakers purchase of Volvo that he wants Volvo cars to compete with top end marques like BMW and Mercedes. Li attributes the Swedish brand’s struggling sales as compared to top flight automakers to the pricing of the models.
A new BMW 740i sedan and Mercedes-Benz S400 hybrid in the US retails for about $70,150 and $87,950 respectively which is more than double of Volvo’s $39,200 for its top of the range sedan, the Volvo S80. Li says Volvo need products to compete in that segment.
Speaking more on the overall progression to profitability, Li pointed out that 380,000 units had to be sold every year for Volvo to become profitable which is a far cry from the 335,000 units they sold last year, suffering a loss of $653 million. In order for Volvo to get an upper hand in the competition, they [Volvo] need to pump out more volume.
Part of the plan is also to create more awareness in the Chinese market of Volvo’s heritage of developing features such as air bags or catalytic converters. In regards to a 380,000 units every year, Li said that no decision has been made and that would require market studies, board and government approval.
He went on to say that he was happy with the Volvo buy branding it a historic opportunity and does not see any similar deals available in the near future. “It’s very difficult to find a good brand like Volvo you can buy. If Mercedes Benz wants to sell itself, I think Chinese companies would be interested”.