Interview: Volvo NA President Doug Speck on R Cars, Design, Geely, and the Future
by George Achorn and Stu Fowle
Feb 1, 2010 - 11:53:00 AM
At the Detroit Auto Show last month, Swedespeed had an opportunity to sit down and chat with Doug Speck, head of Volvo of North America. The topics varied, but his belief in a bright future for the company did not. Read his thoughts about the Geely deal, current and future products, Peter Horbury's return, and, most importantly, the revival of true "R" cars below.
Weve progressed quite far and have details to finish, but the most likely scenario does have Geely signing in the first quarter and finalizing in the second quarter. It isnt done, but it is pretty close.
The more difficult question to answer right now, assuming the transaction gets done, is how does that affect Volvo? All we can go by is the comments Geely has made publicly, which indicate that Volvo will continue to run Volvo. Likely, there will be a board, but there will still be a global CEO residing in Sweden and that person will be responsible for running the Volvo business. Now how that ultimately plays out in regards to Geelys aspirations for the Geely brand, I dont know and cant comment. But they have said clearly that they intend to run Volvo just as it exists today with the addition of a proper board above it.
On 2009 Sales:
Ive said this beforeif youre down 16 percent thats never good, but if the industry is down 22 percent, it could have been worse. We closed the year strong and have grown every month since June, so thats seven months in a row of positive sales. There are only two brands that have grown seven months in a row.
XC60 was a big component of that for us, once it debuted in the second quarter that was the engine that drove our growth. Tremendously well received in the marketplace, not just in America but globally. Demand beyond supply. I think its a car that has clearly done what we would have asked for from a Scandinavian design perspective. If you look at the articles, I think it is unanimously picked as the best design inside and out, and weve stated before that our goal was to continue to evolve our brand in regards to design. It has also continued to push the subject of leadership in safety as I think clearly City Safety is a next generation system that demonstrates that Volvo will keep that leadership position.
On Future Products:
We actually have a lot of new product this year, weve introduced the new C30 and C70 that are showing at auto shows. I think a good example of us getting things together is this cadence, of keeping things fresh. These cars are only three years old and already putting a significant refresh into them. Were also bringing R-design to the XC60, and that will likely show up in March. Yes, clearly the biggest thing thats going to happen this year is the new S60. Its the largest segment in the luxury business, its counterparts in the business are the core products for their brands3-series, C-class, A4and ultimately S60 should be our volume car. Right now we have no inventory, so that needs to change, but it was the volume car through much of the decade. Our lack of cars right now, I think, makes it more impressive that we delivered a good 2009. Literally, we ran out of cars in the second half of the year. You can imagine our dealers are anxious. Its an exciting car. Everyone saw the concept, and thereve been various spy photos. It carries a lot of lines from the concept, you can see that car in there. Its not just going to be big for the segment, its going to be a great car.
On Peter Horburys Return to Head of Design:
You have to give Steve Mattin some credit--he was the influence behind XC60, and he did a great job. Were excited about the S60 too in terms of impact, so we didnt suffer from Peters departure, per se. However, our current design language really relates back to what Peter started in the late Nineties. He knows the brand well, he loves the brand obviously or else he wouldnt have returned. Very talented, well-respected by everyone including the dealers, who know Peter well. So I think it built a lot of confidence in our organization, that we have a bright future in this regard as we go forward. Were anxious to see what comes out of Peters creative mind in the coming years, but were confident that it will be very good for Volvo. It was a good opportunity for us, and hes a good guy.
You know, this car business is so much about design. If you cant get that right, the rest of it frankly doesnt matter much. We always say, if you cant bring someone in because they love your exterior, it doesnt matter how good the interior is or how good your technology is. You also cant afford to be not good at everything. Craftsmanship, handling, design, safety, all of it. Its too competitive, there are a lot of great alternatives. But yes, the evolution of design will be interesting to watch in the coming years. But its going to be good, I know that for a fact because Peters a very talented man.
On Efficiency and the Environment:
Youre likely familiar with our European DRIVe program? That component of our business has grown rapidly to almost 20 percent of our volume, and these are the most C02-efficient range of vehicles in Europe now. Frankly, weve had huge progress in that arena in the past 12 to 24 months, and clearly Volvo knows how to build environmentally sensitive products.
Translating that to America, its clear those trends are growing here as well. Fuel efficiency demands have never been greater, and its something virtually every customer now asks about when they buy an automobile, regardless of segment. Two years ago, maybe 10 percent would have asked that. The change thereeven though gas was four dollars and is now back to twoeveryone is aware it could go back to four and theyre factoring that in their decisions. All of us have to be able to compete on the combination of fun-to-drive and fuel-efficient.
The environmental influence is also growing, perhaps not as much, but some people are saying Im going to purchase a vehicle that makes a statement that Im environmentally conscious. Its a much smaller sliver at the moment, but what all that means is that if youre going to be in the game three, five, seven years from now, you have to provide those alternatives. It is our intention to be in all of those three areas (diesels, hybrids, electric. ed.) What we havent announced is our specific timing timing for launch in America, and I cant do that right now. But we do intend to have them all in America.
On R-Design, Future R Models and Performance:
Would you like some power to go with that?
Personally, and from my position in North America, Id like to have an R derivative that, in addition to design, is performance-enhanced. I would like R-design to evolve to mean all the things it does today plus more power and Im engaged in dialogue related to that right now. Could there be an R-design that includes power, to bring back, while not exactly as we used to do it, that aspirational performance part of the brand? Yes, I believe so and I believe theres a good business reason to do it. Its really about, to a large degree the S range of Audis and the M cars of BMW, its about stretching the image of your brand and expanding your audience. I think historically weve had that componentparticularly in Americaattached to our image and I think it helped our brand. Is it something I can commit to for sure? No. Is it something Im in dialogue trying to convince people to do? Yes, definitely.
What I wouldnt be a fan of is taking a mainstream powerplant and calling it an R. Id rather have an R be something incremental off that mainstream powerplant. If you have a 300-hp T6 in your range, Id like to have a 350-hp derivative for R-design. If you have a 255-hp 3.2 and you want to put an R-design badge on it, I want it to be a 290-hp 3.2. It needs to mean something, consistently, to the consumer. It means this suite of suspension, performance and design, and it means something to the consumer. To me, that would be my preferred route to go. Personally, and in my role, I do think we need to bring R back. I like driving those cars, too.
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