Can boxy turn foxy?
That’s what Volvo is hoping as it prepares for the U.S. launch of its sporty C30 coupe this fall. With its $22,700 price tag, optional 220-horsepower turbocharged engine and sleek, small footprint, the C30 is aimed at the young urbanites who have made BMW’s Mini Cooper a familiar sight in U.S. cities.
Volvo, known for its crate-shaped station wagons and obsession with safety, is trying to reverse a two-year U.S. sales slump. Pitching to a younger audience with cars such as the C30 and the well-received S40 mid-priced sedan -- introduced in North America in 2000 -- is a key element of the Swedish automaker’s strategy.
The S40 “was quite successful in attracting a younger buyer,” Anne Belec, chief executive of Irvine-based Volvo Cars of North America, said this week. “And we think the C30 is going to continue moving the needle in that direction.”
Selling small cars to American thirty- and fortysomethings isn’t an end in itself. In terms of big sales numbers, the C30’s best prospects are expected in Europe, where it debuted last fall.
The goal on this side of the pond, Belec said, is to attract car buyers who normally wouldn’t consider a Volvo.
“It’s bringing people into the showrooms,” Belec said of the early response to the C30 in Canada, where the car began appearing on dealer lots early this year. “And while they’re there, even if this car’s not for them, they have an opportunity to look at the rest of our portfolio.”
They will have a lot to look at, Belec said, including a completely revamped S80, Volvo’s top-of-the-line sedan, which went on sale in January, and a redesigned XC70 crossover, which should hit showrooms in October. An updated V70 station wagon is due early next year.
Volvo could use a boost. Sales in the United States -- its biggest market -- were down in 2005 and 2006 and were off 8% through the first four months of this year compared with the year-earlier period. (Volvo sold about 116,000 vehicles in the U.S. last year, down from 139,384 in 2004, for a market share of 0.7%.)
The stall wasn’t unexpected, Belec said. As older models were being phased out, fresher offerings such as the all-new C70 convertible weren’t in showrooms for the full year in 2006.
Meanwhile, competition is squeezing Volvo from above and below. On the lower end, its V50 and V70 station wagons have lost sales to the Volkswagen Passat and the Subaru Outback; at the same time, new or updated models from Lexus, Acura, Infiniti, BMW and Mercedes-Benz are crowding the middle to upper luxury ranks.
“It’s not that Volvo is doing anything bad. It’s that the competition is doing it better,” said Ron Pinelli, president of sales tracker Autodata Corp. “Volvo is kind of caught in the middle.”
Belec took over Volvo’s North American operations two years ago after holding jobs in various divisions of the automaker’s parent, Ford Motor Co. Her background is in sales and marketing, and she will be keeping a close eye on the campaign that Volvo’s newly hired ad agency will roll out for the C30 in a few weeks.
The focus will be on using the Internet and so-called experiential marketing -- hauling the car to concerts, street fairs, shopping malls and other places where young people gather. This is exactly what has made Toyota Motor Corp.'s Scion brand a niche market success.
Because the automaker is targeting buyers who might never have owned a Volvo, “we have to get this car in the hands of consumers,” Belec said.
Belec, while joking that no CEO ever has enough marketing dollars, says she is getting the funds she needs from her bosses in Sweden despite Ford’s financial troubles.
Despite lagging sales, Volvo and the other members of Ford’s Premier Automotive Group -- Jaguar, Land Rover and the soon-to-be-departed Aston Martin -- provided a bright spot in the parent company’s firstquarter results.
One reason Belec wants to make new Volvo converts is because so many of the current owners just won’t let loose of their cars. The average Volvo on the road today is 9 years old, demonstrating that building a durable car can be a double-edged sword.
“I meet people on the road,” Belec related, “and they say, ‘I have a Volvo.’ And I’ll say, ‘Really, which one?’ And they’ll have a 12-year-old model -- and I’ll say, ‘It’s time to change!’ ”
In the driver’s seat
Subject: Anne Belec
Education: MBA, Fuqua School of Business, Duke University
Career highlights: CEO, Volvo Cars of North America; vice president of sales operations, Volvo Car Corp.; director of North American sales planning and distribution, Ford Motor Co.; general marketing manager of Ford’s Lincoln Mercury division.
Personal: Single. Lives in Coto de Caza. Holds dual U.S. and Canadian citizenship. Hobbies include horseback riding and cooking.
Current ride: 2007 Volvo XC90 sport utility vehicle