Safety-first SUV planned by Volvo

Volvo chairman Li Shufu: Chinese billionaire.
Volvo chairman Li Shufu: Chinese billionaire.

VOLVO is designing its first model under the ownership of Chinese billionaire Li Shufu’s Zhejiang Geely with an emphasis on car safety to revive worldwide sales.

The Swedish carmaker, which introduced the three-point seat belt as a standard fitting in 1959, will load its new XC90 sport utility vehicle with crash-avoidance technology and accessories such as a crystal gear-shift lever by glassmaker Orrefors and a proprietary touch screen compatible with Apple Inc. and Android devices. The model is scheduled for its first public presentation next week and enters showrooms next year.

“I hope that through this product, it will allow Volvo to once again find self-confidence,” Li, chairman of both Volvo Cars and Geely, said in an interview in Hangzhou, China.

The XC90, replacing a version built since 2002, is the initial vehicle in Volvo’s four-year, €10 billion project to produce a broad range of models on a single manufacturing line offering a selection of electric-power variants and safety components. Volvo is working on a separate setup with Hangzhou-based Geely for a small-car range that will use some elements of the technology.

“This car is Geely and Volvo’s first shot after the merger so it has to be loud and heard widely,” said Han Weiqi, a Shanghai-based analyst at CSC International Holdings. “It also gives a hint on the future of Volvo under Geely’s ownership, which is to consolidate its position as a premium brand.”

Ford Motor Co. bought the company for $6.45 billion in 1999 from Gothenburg-based Volvo AB, which had decided to focus on manufacturing trucks and construction equipment, and the two Swedish vehicle producers no longer have equity ties. Ford sold Volvo Cars to Geely for $1.8 billion in 2010 as the company got rid of premium brands amid a streamlining project after the global recession.

At the time of the purchase, Li said he intends to help Volvo Cars “recover the ability to generate blood” instead of relying on successive blood transfusions.

Volvo’s worldwide sales peaked at 458,000 cars in 2007. Its biggest slice of the US, now the world’s second-largest car market, was 0.8% in 2004, versus 0.3% now, according to David Ibison, a spokesman. The brand has accounted for a little less than 2% of Europe’s car market for the past three years.

The XC90 will be equipped with a more vertical grille than its predecessor, as well as headlamps and indicator lights embedded in hammer-shaped fixtures. It will come with as much as 400 horsepower with an optional electric motor add-on. Safety features include systems to sense other cars’ distance and speed at an intersection, prevent the SUV from straying from its lane and tighten seat belts in the event it leaves the road.

Volvo Cars is betting on the model helping the company reach annual sales of 800,000 vehicles.

Even with the brand’s focus on safety, which includes a program to eliminate car-crash fatalities by 2020, drivers look at all aspects of a vehicle when buying a Volvo, said Andreas Bauer, a co-manager of the Autohaus am Goetheplatz dealership in Munich that handles the marque.

The new XC90 is part of Volvo’s drive for “more attractive cars” to close the sales gap with BMW, Audi and Mercedes, Chief Executive Officer Hakan Samuelsson said.

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