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The New Line of Volvo

Volvo  wants to become a competitor again, and they’ve started by showing case their two new SUVs.  They have  embarked on an ambitious new era, formally unveiled the redesigned XC90, a flagship SUV whose sales performance will help recast the Swedish brand’s fortunes in the United States.

The 2015 XC90 — heralding new styling, room for seven, new safety technologies, more fuel-efficient engines and a more premium interior, all packaged on a new flexible platform — is the first vehicle developed by Volvo since its sale to China’s Zhejiang Geely Holding Group in 2010.

When it goes on sale in the United States early next year, the XC90 will join a growing but cutthroat premium midsize crossover market that is dominated by the Lexus RX and a throng of other European, American and Asian rivals.

Detailed pricing will be announced at a later date, but Volvo said today a well-equipped XC90 T6 with all-wheel drive will have a U.S. starting price of $48,900, excluding an estimated destination charge of $925. The XC90 T6 AWD will come equipped with navigation, 19” wheels, a power laminated panoramic sunroof, advanced connectivity, and is expected to deliver what Volvo says will be “best-in-class power and fuel efficiency.”

U.S. sales of the XC90 — one of the oldest models in the segment — have plummeted as the vehicle has aged. In the United States, Volvo sold 3,031 XC90s through July this year and 6,845 in 2013. U.S. sales peaked in 2004 at 39,183 vehicles, when there were fewer players in the segment.

Volvo has a lot riding on the second-generation XC90, which hasn’t been replaced or significantly upgraded since 2002. Company executives plan to leverage the XC90 rollout to spark momentum for the brand, and rebuild profits and operating margins.

It is coming online as Volvo’s U.S. sales have dipped 11 percent this year and fallen seven out of the last ten years. The brand’s U.S. sales peaked at 139,067 in 2004 and haven’t topped 100,000 units annually since 2007, even as the overall light-vehicle market remains on track to expand for the fifth consecutive year.

“This is one of the most important days in our history. We are not just launching a car but relaunching our brand. Today marks a new era for our company,” said Hakan Samuelsson, CEO of the Volvo Car Group. “The XC90 paves the way for a portfolio of exciting new cars to come over the next few years.”

If there is one silver lining for Volvo as it prepares to launch the XC90, it is that Americans have rediscovered SUVs and crossovers. U.S. deliveries of premium crossovers have jumped 12 percent this year through July, according to the Automotive News Data Center.

Still, the XC90 will compete with more than 20 nameplates including the Acura MDX and RDX, Lincoln MKX, the BMW X3 and X5, the Cadillac SRX, two Porsche models and the Audi Q5 and Q7. Audi and BMW have signaled intentions to expand their crossover lineups, and Jaguar and Maserati plan to market crossovers for the first time.  Will the Volvo vehicles be able to compete against all of this competition?

 

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