Volvo barely existed in the U.S. car market when it sales moved close to zero five years ago. China’s Zhejiang Geely Holding Group bought Volvo from Ford Motor Co. (NYSE: F) in 2010, and the luxury car maker started to turn around. That turnaround is well under way in the United States, where Volvo’s sales rose 90.5% in November, to 6,902, compared to the same month last year.
Volvo sales are still a tiny part of the U.S. market, and its sales growth for the first 11 months was slower than those of November. Year to date, Volvo’s sales were 60,705, up 18%. It sales are little better than niche SUV Land Rover’s.
A major part of the Volvo improvement is that it is selling models in November that it did not have a year ago. In particular, sales of its new XC90 were 2,236. The current version of the car was not on the market a year ago. The vehicle was the 2016 Motor Trend SUV of the Year, which gives it a level of visibility that large sums of advertising cannot buy. The sport utility vehicle seats seven and has a base price of $48,700, which makes it competitive with other entry-level luxury SUVs. That said, the XC90 sells in a crowded market of car companies with much larger marketing budgets and dealer networks.
Just as critical to Volvo’s November success were the numbers put up for the XC60, the sales of which rose 24.6% to 2,077. Year to date, sales have risen 31.6% to 22,623. The XC60 has about 40% of the manufacturer’s U.S. sales for the year. The XC60 is a crossover with a base price of $36,400 and a particularly impressive acceleration rate due to a 325-HP engine. Once again, the crossover competes in a crowded market.
Volvo’s ability to reached even 100,000 sales a year will be blocked by vehicles that match its line-up from Germany car companies BMW, Mercedes and Audi, as well as the Lexus division of Toyota Motor Corp. (NYSE: TM). 2016 will be the year in which Volvo will prove whether it is a competitor in the U.S. mid-luxury market or one that barely has a toehold.
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