Volvo Car Corp. is moving its top product executive to New
Jersey in a shake-up designed to fuel sales momentum in the U.S.
market and lay the groundwork to break ground on a factory on
American soil before the end of the decade.
Volvo, owned by China's Zhejiang Geely Holding Group Co., will
name Lex Kerssemakers as the chief of Volvo Cars of North America
Wednesday. Mr. Kerssemakers has spent decades at the Swedish brand,
most recently steering the company's $11 billion product overhaul,
and is widely seen as one of Volvo's most seasoned executives.
In an interview Tuesday, Mr. Kerssemakers said his immediate
goal will be sparking the auto maker's poor performance in North
America. Bolstered by low gas prices and a stable economy, U.S.
auto sales have boomed. But Volvo has fallen behind, with sales
slipping 8% to 56,000 deliveries in 2014.
Volvo's goal is to sell 100,000 vehicles in the U.S. by 2018,
according to an internal report authored by McKinsey & Co. and
viewed by The Wall Street Journal. Its marketing budget will be
boosted by hundreds of millions over the next couple of years,
according to McKinsey, which should give Mr. Kerssemakers more
resources to engineer a comeback in a U.S. market clamoring for
luxury vehicles.
Once owned by Ford Motor Co., the Volvo's U.S. performance has
wilted since being taken over by Geely in 2010. While the auto
maker has grown significantly in China and sales in Europe have
stabilized, Volvo's U.S. dealers have been unable to keep up with
German and Japanese competitors, and now the company sells as many
U.S. cars in a year as General Motors Co. in a week.
In an interview last week at the Detroit auto show, Volvo Chief
Executive Håkan Samuelsson said he is reviewing product-sourcing
plans and will need to consider adding U.S. manufacturing capacity
once the company hits the 100,000 goal. He declined to discuss
specifics of future sourcing plans, but said there is sufficient
global capacity to support Volvo's near-term goals.
Mr. Kerssemakers, a Dutchman, will succeed Tony Nicolosi, who
headed Volvo's U.S. operation for about 15 months. Vice President
Henrik Green will take over as Volvo's product chief on an acting
basis.
Moving one of his top lieutenants to the U.S. underscores Mr.
Samuelsson's urgency in fixing the American operation. Mr. Nicolosi
will now head Volvo's vehicle-financing activities in the U.S. Mr.
Kerssemakers will also oversee South American activities.
The introduction of a new XC90 SUV, aimed squarely at BMW AG and
Audi AG, will help Volvo regain market share in 2015, Mr.
Samuelsson has said. Volvo will also begin shipping sedans from a
new plant in China to the U.S. later this year, becoming one of the
first large-scale auto makers to attempt selling Chinese-built cars
to American consumers.
Echoing Mr. Samuelsson, Mr. Kerssemakers said Tuesday that Volvo
needed to speed up its revival in the U.S. A small car and its XC40
compact SUV are also in the pipeline for world-wide launch later in
the decade, and Mr. Samuelsson said Volvo would double its U.S.
marketing budget in 2015 to get back on the radar before more new
vehicles launch.
Mr. Kerssemakers will focus on two assets that have defined
Volvo throughout its history: safety and fuel efficiency. The auto
maker now exclusively uses smaller, more efficient four-cylinder
engines and the subject of safety is "hotter than ever," he
said.
Mr. Kerssemakers declined to discuss specific future product and
manufacturing plans. Volvo is spending $11 billion on new product
development between 2011 and 2016, and has made plans for three new
factories in China.
Write to John D. Stoll at john.stoll@wsj.com
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