Volvo, Geely developing sub-compact

Volvo and Geely Automotive (Volvo’s owners in China since 2010) are developing a subcompact vehicle platform in the joint Swedish research and development centre the partners opened last year.

Reports say the small model will be used exclusively by Geely to compete against the Ford Fiesta, Volkswagen Polo and Toyota Yaris.

A Volvo version has not been ruled out and according to Volvo UK sales director Jon Wakefield: "Looking at the growth in the market segment a sub-compact would be welcome as long as it comes with all that is Volvo in terms of class leading safety, environmental efficiency and economy - but it's certainly not in my field of vision now.”

Despite being on sale for 11 years, sales of Volvo's large XC90 sport utility vehicle (SUV) have been holding up well at a time when other car makers have been upgrading their designs like Nissan with its Qasquai. Clearly Volvo has taken its eyes off the ball as it regroups under its new leadership.

In the UK, with around 2,500 leaving UK showrooms last year, Wakefield expects a similar number in 2014 despite the fact that production of the vehicle stops this summer shut-down as the factory prepares for the new generation model due early 2015 – a move that many must welcome.

Wakefield claims there has been “no negative impact” following the sale of Volvo by Ford Motor Company to Chinese carmaker Geely Automotive in 2010. Why would there be? What has Geely done to upset the world?

Wakefield adds: "Certainly people have not been discouraged. Volvo is so Swedish and I don't think the average car buyer concerns themselves too much about the ownership of the company."

According to Wakefield, despite the run-out of a number of models, Volvo's order book in the UK is growing significantly thanks to “a change in the way the company talks to its customers in the UK”.

Wakefield claims the order intake for the first month of this year is running 58 per cent ahead of January last year and comes off the back of 3 per cent growth in 2013.

Wakefield added: "UK growth last year was a little down compared with the rest of the industry but it was eight per cent ahead of the previous year and we had the run out of models including C30. We are growing faster now after refocussing dealers on selling cars through PCPs rather than through large cash discounts. This is the way the market has been moving on the retail side."

Volvo sales in the UK last year totalled 32,666 and Wakefield is looking to hit 35,000 in 2014 with the push on PCPs expected to boost the retail side of the business which currently accounts for around 35 per cent.

V40 was the strongest seller last year and looks to be doing the same this year with the C-segment remaining very strong as people downsize, however the XC60 has also performed strongly "and is not that far behind", he added.

Business sales in the UK into fleets have held up well for Volvo and new engines currently being rolled out should maintain the appeal. The 181 bhp D4 engines come in at under 100 g/km on S60 and V60 model and a class leading 117g/gm - 18 per cent on the front-wheel-drive XC60 and XC70 models.          ∎