2021 has been good for Volvo with sales up 6%, but it did slow toward the year's end. In December, registrations were -16% as the chip shortage affected volume. All car models were down and all SUVs were up. Were they prioritising chips for the more profitable SUVs? Partly the reason perhaps but a trend we see everywhere anyway.
Years ago, the marque was a genuine competitor in the premium segment. An obsession with designs featuring squares and rectangles eventually caught up with it and it became marginalised on the sales charts. The company is now designing more rounded, pleasing shapes yet still retaining its reputation for outstanding safety. Reliability is average, which is similar to premium marques generally. Mind you, owners of such cars expect all the latest bells and whistles, and therein lies the problem.
SUV's are driving sales with 75% of the total volume. The company is eyeing 800,000 units per annum as a goal and it doesn't seem that far off that now but chip shortages and other issues will get in the way for the time being.
"Were they prioritising chips for the more profitable SUVs?"
ReplyDeleteIt is quite the opposite of what happened. Volvo actually pushed all the customers looking for value for money (traditional Volvo customers) towards the nimble V60 by removing the entry level engines from the SUV range.
Others might claim to go upmarket, e.g. in the case of Nissan, but there is nothing to back up this claim. Current Nissans definitely did not get more upmarket, the only thing they can do, is killing niche versions (and thus reducing some costs). But this is a dead end street, as they eliminate cars that people would still buy.
The result is selling even less cars, having even less revenue for development.
Volvo on the other hand, first developed attractive models and constantly brought out new tech developments, like new engines.
The phased out diesel engines prematurely, and in the case of XC60, without replacement. In some European countries, registration tax is still per tax-horsepower, and the difference between a basic 150PS D3 and a current B4 with 197 is several thousands of euros.