Volvo Car Strengthens Electric Vehicle Lineup, Online Sales in Japan

Volvo Car’s vehicle sales in Japan increased 6.8% year-on-year in 2019 to 19 thousand units, going up for the fifth consecutive year. Two SUV models drove up overall sales in 2019. The XC40, which was newly launched in March 2018, became the best-selling model by surpassing the V40 with 4,594 units, 2.5 times more than the previous year. The XC60, ranked fourth in 2019, also increased 17.5% to 3,173 units. The XC40 and XC60 had a lot of backlog, but sales increased due to improved supply in 2019. The fully upgraded S60, launched in November 2019, increased 27.8% to 612 units. Volvo Car has decided to discontinue the use of diesel engines in the future due to diesel fraud in Europe, so there is no diesel version of the new S60. Volvo Car plans to fill the gap caused by the elimination of diesel vehicles with electric vehicles, and is expanding its lineup of MHEV and PHEV models. The MHEV versions of the XC60 and XC90 were added in April 2020. PHEV versions of the XC90, V90, XC60, V60 and S60 are already available, but Volvo Car has announced that other models will also adopt PHEV system. It is expected that the XC40 PHEV will be commercially available within the year.

The number of Volvo models sold from January to May 2020 fell 14.4% year-on-year to 6,271 units. Suspending factories around the world due to the outbreak of the new coronavirus is expected to have an impact on sales in Japan in the future. In an effort to reduce the number of visitors to dealerships, Volvo Car started online product introduction at all dealers in July 2020. This has made it possible to offer reference prices for new cars, used cars, and trade-in cars online. Presently, it is necessary to fill out a final paper-based contract in person, but Volvo Car is preparing a system to complete contracts online.

Volvo Car: Business Developments in Japan (Since July 2019)

Products

Fully-redesigned S60

・On November 5, 2019, the fully-redesigned S60 was released for the first time in eight years (3rd generation). – By reducing the overall width to 1,850mm, which is 15mm less than the previous generation, Volvo has realized a size that considers the Japanese market. – Diesel engine version is not included in the lineup. – The S60 is manufactured by the Charleston Plant in South Carolina, USA.

Adding MHEV versions of the XC60 and XC90

・On April 23, 2020, Volvo added MHEV versions of the XC60 and XC90. – The models are powered by the newly-developed 48V hybrid powertrain B5. – The B5 uses the 3rd-generation Drive-E engine which is a four-cylinder 2.0L gasoline engine. – Entry price of the XC60 B5 is 6.34 million JPY and that of the XC90 B5 is 8.24 million JPY. – By 2025, BEVs are aimed to account for 50% of global sales, while PHEVs and MHEVs (48V) are intended to account for the rest.

Exhibition at Tokyo Auto Salon 2020

・In January 2020, Volvo Car displayed the S60 Polestar Engineered and XC60 Polestar Engineered, high-performance versions of the S60 and XC60 models at the Tokyo Auto Salon 2020. – Around summer 2020, a limited number of the T8 Polestar Engineered versions of the S60, V60 and XC60 models are scheduled to be launched.

New plan of the SMAVO subscription

・In November 2019, Volvo Car introduced new plans SMAVO 2/3 and SMAVO 3/5 to the SMAVO lease plan, which allows customers to use Volvo vehicles for a fixed monthly amount. – With SMAVO 2/3, the vehicle’s ownership can be changed by a 200,000 JPY (tax-excluded) settlement after two years under a three-year contract. The settlement payment is not necessary if the ownership change takes place at the end of the contract period. – With SMAVO 3/5, the vehicle’s ownership can be changed by a 200,000 JPY (tax-excluded) settlement at the first vehicle inspection. If the ownership change takes place at the third vehicle inspection, only the inspection fee is required while the settlement payment is not necessary. – The new plan started with the new S60 and expanded to all vehicle models except the V40 series starting from January 1, 2020. – SMAVO contracts accounted for about 9% of all new vehicle sales in 2019.

Impact of New Coronavirus

Appointment of new president postponed

・In July 2020, Volvo Car announced that the appointment of Martin Persson, who was scheduled to become President and CEO on July 1, will be significantly delayed. – The delay is due to entry restrictions to Japan and departure restrictions from Russia where Martin Persson is currently residing. – The previous president and CEO Takayuki Kimura (who joined in July 2014) retired on March 2, 2020. Until the appointment of the new president, Richard Snijders, who is currently in charge of APEC (Asia-Pacific, excluding China) and Masaki Sugawara, general manager of the sales headquarters, will be in charge.

Online product introduction at all dealers

・On July 2, 2020, all Volvo Car dealers started online product introduction. – The “Volvo Digital Lounge” page on the website provides product introduction and test drive opportunities, reducing direct contact with staff. – The salesperson uses a special tablet terminal to explain the product while showing the car in the showroom on the screen. – Not only proposals for new and used vehicles, but also proposals for purchase prices including reference prices for trade-in vehicles and loans are available online. – Regarding test drive, Volvo Car is promoting "test drive without riding together" by providing a video with explanations and points of experience so that customers can get the same experience as when they actually ride a vehicle. – Presently, it is necessary to fill out a final paper-based contract in person, but Volvo Car is preparing a system to complete contracts online including sales and loan contracts.

Main factory in Sweden restarted

・On April 20, 2020, Volvo Car resumed operation of the Torslanda plant in Sweden which suspended operation on March 26 due to the outbreak of the new coronavirus. The Ghent plant in Belgium also reopened on the same day. – The Charleston plant in the US, which suspended operation on March 26, restarted production on May 11. – The suspension of production is expected to negatively impact supply in Japan; however, it is likely to be limited considering that Volvo Car has already resumed production. (Created using Volvo Car Japan’s PR materials and various media sources)

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