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New niche models will take Volvo past 60,000 UK sales

Volvo dealers can expect a flurry of new car launches over the next five years as Ford positions the marque as its volume brand within the Premier Automotive Group.

Likely launches include a car sitting below the forthcoming S40 and the much-mooted XC50, a baby version of the acclaimed XC90. A new convertible will be launched next year, built by Pininfarina at the Uddevalla plant in Sweden.

“An XC50 could add around 50,000 units to our global sales,” says a Volvo spokesman. “Ford can see the niches in which this brand can play in order to reach its target of 60,000 sales in the UK. We are the best placed within PAG for an expanded product range.

“We are confident and we are making money,” he adds. Ford is believed to have signed off many of the model expansion plans already as it looks ahead to 2010. Volvo launches the S40 and V50 over the next couple of months with modest sales targets this year of just over 4000, although the company expects volume to peak at around 20,000 units in a full year. That would take total UK sales, predicted to hit 42,000 this year (2003: 39,062) to more than 50,000.

Confidence also comes from the massive demand for the XC90 – waiting lists are currently around 18 months. Volvo has secured an additional 1,500 cars from America, taking volume this year to 6,735, enough to shave a few months from the waiting period. It believes demand could easily double this figure, but executives are happy to enjoy the strong residual values resulting from the supply shortage.

“Too many manufacturers are giving away profit through over-producing,” says Volvo national sales manager Ken Anders. “We will not force the market, however.” He is looking for more dealers to join the rental scheme, which was launched last August. So far, 12 of the 143-strong network have signed up, and Anders wants another 10 this year. Since the start of the scheme, which offers new Volvos for short or long-term hire, almost 2,000 bookings have been placed with dealers, resulting in nearly 15,000 rental days and revenue exceeding £350,000.

Anders is also investing resources in developing a comprehensive database of potential fleet customers and says dealers have details of around 450 companies to target.

“Our challenge is to grow fleet sales while also focusing on our retail business,” he adds.

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