Volvo on track for highest sales in 25 years

Best result since local assembly shut down – but it could have been better
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Volvo Car Australia is on track to record its best annual sales result since it became an import-only brand in the 1980s.

Volvo Car Australia is on track to record its best annual sales result as an importer – and its best result since 1985, just a few years before it ended local assembly at Nissan’s Clayton plant in November 1988.

The Swedish car maker expects to reach 5500 sales when the books close on 2011, an increase of about 10 per cent compared to last year and ahead of the local market, which was down 2.4 per cent to November. (It sold 5579 cars in 1985 after a peak of 6771 sales in 1981.)

But Volvo won’t be breaking out the good champagne because it says it was on-track to post a 20 per cent sales increase – until it was caught short of stock mid-year.

The managing director of Volvo Cars Australia, Matt Braid, says the result is “on the whole disappointing, but in the record books it’ll be a good year for us”.

“The [selling] rate of XC60 and XC90 [SUVs] was actually a lot higher than what we anticipated [in the first half of the year], so we ran out of stock a lot quicker,” he said.

“That probably cost us about 450 cars. Ideally we would have been very close to 6000 [annual sales] which … would have been up 20 per cent.
We will finish [the year] good anyway, but we could have finished a lot better. So we’re a little bit angry at ourselves.”

Volvo knew it was running short of cars by June and placed urgent orders for more. But the European factories shut down in August for the summer break and the extra cars are only beginning to arrive now – and won’t be delivered to customers until the new year.

“This has been a big hiccup for us,” said Braid. “It was a mad call before and after the shutdown. When the factory reopened we were first in the queue.”

Despite the quick action, it takes five to six weeks for the XC90 and XC60 (pictured) to come from their respective factories in Sweden and Belgium.

Most of the cars en-route are already sold, which should give Volvo a strong start to the new year. With no new models and an aging line-up, Volvo will need all the help with supply it can get.

“Next year we’re going to get our stock a lot better organised, I can assure you,” Braid said. “That’s a big learning from this year. We’re looking at increasing volume again … another 10 per cent.”

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