Savings become Volvo’s priorityApril 22, 2020
The Swedish automaker has several brand new solutions.
The coronavirus pandemic caused serious economic damage, and the automotive industry, in particular, is suffering its consequences. Sales fell, and in most countries production stopped altogether. With a drastically reduced income, carmakers need to “tighten their belts,” and Volvo also.
“There are thousands of projects in our research and development, and we need to question the need to complete them,” said Volvo CEO Hackan Samuelsson.
Although he declined to indicate which specific projects were intended for possible liquidation, the publication suggests that previously planned mid-level updates might be delayed as part of these efforts to cut costs. One example is the Volvo S60, which will hit the market in early 2019. A mid-level upgrade could have been planned for 2021 or 2022, but it remains to be seen whether this will happen on time or not.
According to rumors, Volvo will work on a new flagship SUV, which may be called the XC100 and compete directly with the Land Rover Range Rover. It can also be put on the back burner. But there are two areas where Volvo refuses to cut funding: electric cars and autonomous technology.
These are two areas in which Volvo strives to become a world leader and has achieved excellent results. Why lose the momentum when budget cuts can be made elsewhere? The all-electric Volvo Recharge SUV, based on the XC40, is just the first of a new line of electric vehicles that is likely to extend to sedans.
The research and development projects referenced by Samuelsson are, of course, confidential, but now the time has come to decide: what will “stand on the shelves” and what will continue. It all comes down to priority, depending on what competitors are doing and whether these projects are vital to EV and stand-alone technology.
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