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VOLVO Car Australia is defying the general market slowdown and the decline in the prestige and luxury car sector with phenomenal sales growth this year of 44.2 per cent, which will take the Swedish brand past 6000 annual units for the first time.

As many of its major rivals find the going tough in the current conditions – including Mercedes-Benz (-10.1% YTD), BMW (-3.8%), Audi (-9.3%), Land Rover (-18.6%), Lexus (-3.1%) and Jaguar (-4.0%) – Volvo has just posted 691 sales in October for a 68.1 per cent increase over the corresponding month last year, bringing its year-to-date total to 5616 units.

This places it just 262 sales shy of its all-time record 5878 sales achieved in 2016 – a record that will be broken during November – and marks its eighth consecutive month of double- or triple-digit growth, a string that does not look like it will be broken any time soon and could see it break through 7000 units overall by the end of the year.

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The company owes everything to its SUV model range, with the game-changing XC40 small SUV launched early this year accounting for 1200 of the 1721 sales by which Volvo is running ahead at this stage of the year, and cameo roles played by its top-selling mid-size XC60 (2367, +50.8%), the flagship XC90 (976, +9.9%) and the V90 Cross Country (50, +38.9%).

Indeed, Volvo’s passenger car model range is now basically down to the V40 compact car (663, -13.4%) and the S90 luxury sedan (91, +127.5%), with S60 and V60 not troubling the VFACTS statisticians for the past four months with stock running dry.

Volvo Car Australia (VCA) director of corporate and PR Greg Bosnich has confirmed to GoAuto that the company plans to launch the new-generation versions of both the S60 and V60 next year, but they are now not expected to arrive until late in the third quarter or early in the fourth.

Nonetheless, Mr Bosnich said VCA is still expecting to maintain its impressive sales growth rate, forecasting another 30 per cent increase for 2019 over this year’s result as it enjoys a full year of XC40 in the market and continues to work on improving supply lines across the broader SUV range.

“We see that we will have a minimum 30 per cent growth this year, which as you can see we’re still on track – we obviously have to finish the year off, but that’s where we are going – and we foresee a similar type of growth again next year,” he said.

You are the one: The all-new XC40 has added 1200 incremental sales to Volvo’s bottom line since its launch earlier this year and, with no supply restrictions, could to push up to around 5000 units per annum.

This could see Volvo comfortably shift 9000 units next year, and on track to achieve the 10,000 annual sales mark that VCA managing director Nick Connor identified to GoAuto earlier this year as an achievable target by 2020 – more than double the volume it achieved only last year.

As GoAuto has reported, VCA, under Mr Connor’s guidance, will look to broaden its model range where appropriate and invest more heavily in areas such as marketing and dealerships in an effort to improve its brand image and representation.

With the figures for the year to date, Volvo’s declaration that it is embarking on a new era clearly ring true.

Last year’s 4681-unit tally was the worst result in years for the brand – a whopping 20.4 per cent comedown from the record set the previous year – but concentrated efforts with excellent product in the all-important high-growth SUV segments have made an immediate impact.

Over the past decade, Volvo has been remarkably consistent in posting annual results of between about 4500 and 5500 sales, averaging 5009 from 2008 to 2017.

XC90

Track back a decade further and the European brand, which has been selling cars here since 1961, similarly averaged 3393 units a year from 1998-2007, with key new additions such as XC90 taking overall sales past 4000 units for the first time in the mid-2000s.

The business model hasn’t changed much over the years – the right product at the right time makes all the difference for a brand that remains highly regarded for its safety and technology – although the XC40 has brought a new element – engaging, courageous design – that is clearly being well received in the market.

The Australian operations are also benefiting from Mr Connor’s close connections back in Volvo Cars’ Gothenburg headquarters – where he previously served as vice-president in charge of Europe, the Middle East and Africa – and his experience running Volvo in the UK, where he is credited with achieving a 60 per cent increase in sales volume.

Just weeks after joining VCA, Mr Connor told GoAuto in May that he had already extended this year’s growth forecast to at least 35 per cent with 6500-plus retail sales, and that “frankly, given enough investment and enough product, I think with our current product portfolio 10,000 is a very realistic number for the Australian market”.

He also said that as XC40 production frees up, there was potential to reach 5000 sales a year with that single model line.

At 10,000 sales per annum, Volvo would most likely find itself among the top-five prestige brands, nestled behind the dominant German marques – Mercedes, BMW and Audi – and potentially pushing past Lexus to threaten Land Rover for fourth spot.

By Terry Martin

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