Volvo Cars, the premium car
maker, has announced new financial and operational ambitions that will position
the company as a leading player in the global automotive business by the middle
of the next decade.
On the operational side, it
expects to generate half of all sales annually from fully electric cars, one
third of all cars sold to be autonomous driving cars and half of all cars it
offers to customers from its subscription service.
Volvo Cars expects these
initiatives to transform its connection to its customer base, with the aim to
build a total of over 5 million direct consumer relationships by the middle of
the next decade, creating new sources of recurring revenue. This will also
offer the company far greater potential to develop connected and other services
“Our customers’ expectations
are changing rapidly. This means that Volvo Cars is also changing rapidly.
These initiatives will help transform Volvo from being purely a car company to
being a direct consumer services provider,” said Hakan Samuelsson, president
and chief executive, Volvo Cars.
On the financial side, Volvo
Cars aims to generate premium level profitability in line with other premium
car makers, driven by increased sales and revenues across all three global
sales regions, and a broader range of cars including sales to the new segment
of autonomous ride-hailing companies.
The company’s improved
financial performance will also be driven increasingly in the future by industrial
synergies generated with its affiliated partner companies.
Volvo Cars expects to benefit
from lower procurement costs, shared development costs and economies of scale
alongside Polestar, its premium performance electric car brand, and Lynk &
Co, the new global car brand in which Volvo Cars owns a 30 per cent stake.
“This paves the way for Volvo
Cars to continue growing fast into the middle of the next decade,” said Samuelsson,
adding that “The company has been transformed since 2010 into a global premium
car company. Now it is time for this transformation to be turned into a period
of sustained profitability in line with other premium brands.”
Volvo Cars achieved record
profits and sales in 2017, with a 27.7 percent increase in operating profit and
global sales of 571,577 cars. The results marked the company’s fourth
consecutive year of record growth, underlining the transformation of Volvo’s
finances and operations since being acquired by Geely Holdings. It has also
expanded its global manufacturing footprint and completely renewed its model
portfolio in recent years.
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