Volvo people will tell you that the company makes money by selling not that many cars, or just over 705, 452 globally in 2019, compared to rivals like BMW or Mercedes which do over three times that. And perhaps in part because its ambitions aren’t for volume Volvo said this week it expected a full sales recovery in the second half of this year.
As the Financial Times notes, this prediction, via Volvo’s CEO, is the rosiest of almost any automaker out there, most of whom are predicting better sales in the second half of 2020 compared to the first half of the year but not … that much better. Most automakers, in fact, don’t think they’ll fully recover until next year or beyond. But not Volvo.
From the Financial Times:
The Swedish auto group fell to a loss in the first six months as car sales tumbled by a fifth, but has seen China recover and sales in all markets in July rise to “slightly above” the previous year’s figures.
“I think we could really see the business effects of the pandemic confined to the first six months,” chief executive Hakan Samuelsson told the FT.
“We do not need a miraculous recovery, just that the trends we have seen will continue,” he said. “We don’t see a second wave coming.”
Volvo’s reliance on sales in China to help its recovery is very Tesla-like, even if Volvo remains an interesting contrast to a company like Tesla, whose ambition isn’t to be the next Volvo, even though it probably should be. That’s because Volvo knows it isn’t for everyone and is satisfied with that, while Tesla thinks it can be what Ford was a century ago.
But for all the press it gets, Tesla isn’t even a Volvo yet, delivering about half as many cars as Volvo globally in 2019 while losing $US862 ($1,211) million in a year when Volvo made $US1.6 ($2) billion. And while Tesla may yet become the biggest automaker in the world by production (it’s already the most valuable, on paper), Volvo stands as an argument for the opposite ambition. Make cars, not too much, mostly safe SUVs and wagons.