Volvo S40 Jan-Aug sales hit 3,889 units in China

Volvo Car Corp., a subsidiary of US auto giant Ford Motor Co., is suffering from small sales in China's luxury car sector.

Statistics show that the sales of its China-made Volvo S40, a compact sedan model, totaled 3,889 units in the country in the first eight months of 2008, down 6.83 percent from a year ago. It has been a foregone conclusion for the company to fail to achieve its sales goal in the Chinese market this year and it will be its second failure to achieve its sales target in the market since 2007.

Sources said in early August 2008 that Ford Motor planned to shift the brand Volvo onto a family-oriented sedan brand from a luxury sedan brand after Volvo announced a 2,000 job downsize in June. It was regarded a strategic move the US automaker planned to take to boost Volvo car sales. Volvo will become a family-oriented sedan manufacturer provided that the saying were true.

However, the saying was soon denied. Volvo will not change its strategy in China and it will focus on the nation's luxury sedan sector as usual. In order to boost sales, it plans to revoke its regional agent mechanism in the country and take charge of the sales network here on its own.

In addition, it allowed some of its dealers in China to sell not only China-made Volvo cars but also imported ones. Notably, Stephen Odell, who was nominated as Volvo's president and chief executive officer in early September 2008, said in a statement that it would take move to strengthen Volvo as a global luxury car brand.

Statistics show that the sales of China-made Volvo S40 reached 3,181 units in China in the first half of 2008, inching up by 1.4 percent year on year. However, the sales of imported Volvo cars reached 3,508 units in the country during the six months, surging 28 percent from a year earlier.

Industry experts attributed the poor sales of China-made Volvo S40 to the local production of the car model in the country. The quality of China-made Volvo S40 is lower than those imported ones and the best way for Volvo to change the situation is to seek new an OEM rather than lowering prices.