The Volvo Concept You hints at the direction the maker plans to take, including its shift to small 4-cylinder and battery-based powertrains.
Volvo is committed to using only four-cylinder engines across its entire model line but it could take as long as five years to implement the strategy completely, according to John Maloney, the Chinese-owned Swedish maker’s U.S. president and chief executive officer.
During a keynote speech at the Chicago Auto Show, Maloney pointed to ongoing market trends and the likelihood that fuel prices will ultimately go up again to explain why Volvo is moving to an exclusive four-cylinder strategy even while key competitors emphasize sixes, eights and even 12-cylinder powertrains.
“It just makes sense,” he said, noting that not only are fours more fuel-efficient but today able to match the power and performance of traditional, larger engines. The technology also will make Volvo’s operations more efficient but simplifying the company’s purchasing and manufacturing operations.
During a wide-ranging speech, Maloney made it clear that Volvo wasn’t straying too far from its roots, with their heavy focus on safety. The Swedish maker – which was purchased by China’s Geely holdings nearly two years ago – has set a goal of ensuring that by 2020 that there will be no crash fatalities for those riding in Volvo products.
Maloney also predicted the auto industry will weather the spike in gasoline prices that the U.S. Energy Information Administration has predicted is coming this spring. The EIA has predicted that gasoline prices could reach 4 dollars per gallon as prices climb.
“Everyone expects gas prices to increase, we don’t see that as a barrier to the industry, (especially to) expanding sales,” said Maloney.
The maker has to hope not. Volvo was the fastest-growing luxury brand in the US in 2011. Volvo sold 495,000 vehicles worldwide, last year and expects to expand sales to 800,000 units annually before the end of the decade.
Maloney’s optimism was meanwhile echoed by other senior executives on hand for the 2012 Chicago Auto Show.
Hyundai Motor America’s chief executive officer told reporters that 2012 got off to a fast start in January. “We had a pretty good January,” proclaimed CEO John Krafcik, adding Hyundai now has six vehicles that get 40 miles per gallon, which helps neutralize the rising price of gasoline prices. If anything, Hyundai officials worry they won’t be able to keep up with the U.S. market growth due to limited production capacity.
Nevertheless, the mood at the show is probably better described as one of “cautious optimism,” with industry officials well aware of the fragile nature of the overall U.S. economy, hints of a slowdown in China and ongoing debt issues plaguing Europe.
Said one Ford execuctive, who asked not to be identified, consumer confidence still relatively “shakey,” which means the booming sales of the last several months could come crashing down rapidly if the economy again turns downward.