How the Volvo XC90 saved the Swedish firm

As Volvo prepares to launch a large electric SUV late this year, a zero-emissions equivalent to the Volvo XC90, and pushes forward with its broader growth plans, Lex Kerssemakers, soon-to-be-retired commercial operations boss who has worked at the maker for 38 years, reflects on where Volvo has come from and what the future holds.

You’ve been at Volvo more than 30 years: what is the biggest change you’ve seen in that time at the firm?

The most important moment for me was the move from Ford to Geely. Under American ownership in 2000, it was very popular to do batch engineering, share lots of parts, share platforms, produce multiple cars in one factory. What we learned under Ford was that if we don’t have a very clear brand and product strategy, we could easily have faded away within a big corporation. 

Then we were taken over by Geely in 2010. We were bankrupt because Ford was in bad shape. We learned from our mistakes and stayed close to our values. If the Chinese hadn’t given us carte blanche - they said ‘develop the cars you think you need’ - we wouldn’t have found the success we have. It was a big big change for Volvo. From 2010 to 2015, we worked on the new portfolio. Back then, everyone thought we were nuts to downsize to a four-cylinder turbo, but now it’s everywhere. And we took the first step towards electrification with plug-in hybrids.

What’s the most important car Volvo has launched in recent times and why?

The XC90 in 2015. It was the first car out under Geely, and it was the most difficult car. It was the next design language, which needed to appeal to existing customers and new customers. At the time we were selling 450,000 cars, and we needed conquest to move towards 800,000 units (it sold just under 700k last year). It was a new design, new platform, new engine platform - moving to four cylinders - that combination needed to work. If we’d failed, our image would have gone down the drain.

Volvo has stated a 1.2m volume goal by mid-decade. Are you on track? Do you want to be selling 2m cars like BMW?

We have the right portfolio and we have the right momentum. It’s become an unclear target because of the supply constraints - we sell what we produce and I strongly believe that if we manage to increase production, our targets can be hit. 

We’ve stopped predicting - we take it month by month, or at most, quarter by quarter. We said previously that supply issues should be better by mid 2022 and suddenly Shanghai is closed and disrupting the entire supply chain.

BMW’s level was never our goal - 1.2m is where we stop for the moment. We continuously need to find the balance between growth and profitability.

How will your partnership with battery supplier Northvolt help Volvo’s EV transition?