Volvo Is Still Seriously Swedish

Gary S. Vasilash

With Volvo Car Group being owned by Zhejiang Geely Holding, a Chinese company, some Wallander-oriented people might think that the company might lose some sort of essential Swedishness.

Not to worry.

The company has announced a rather significant investment in its Scalable Product Architecture (SPA) and its Volvo Environmental Architecture (VEA), a massive chunk of which will be made in Sweden: “Almost half of the approximately 11-billion USD investments covering the years 2011 to 2015 will be spent in Sweden in the form of infrastructure for the new vehicle architecture and engine family. This is a proof of Volvo Car Group’s determination to strengthen the company’s position as a Swedish car maker with a unique attractiveness on the global market,” said Håkan Samuelsson, president and CEO of Volvo Car Group.

2013 Volvo XC90

2013 Volvo XC90.  The next-generation will be based on the Scalable Product Architecture.

A good chunk of the investment will be spent in its Swedish production operations:

  • The Torslanda plant is getting a new body shop
  • The plant in Olofström is being modified to accommodate vehicles with the SPA
  • The Sköve engine plant is being capacitized for the VEA

In addition to monies are being spent for SPA and VEA product development at the company’s development center in Torslanda.

While Volvo is being somewhat mum about the specifics of the SPA and VEA, essentially, the former is predicated on having a common vehicle architecture that will allow the company to produce a variety of different vehicles on the same production line (the first vehicle to feature SPA will be the next-generation XC90, which is scheduled to launch at the end of 2014); the VEA is a range of engines, all of which are four-cylinder.

Peter Mertens, Volvo senior vice president, Research and Development, said, “SPA makes us technologically independent, without any link whatsoever to our previous owner. The new architecture covers about two-thirds of our total sales volume. With about 40% of all components shared by all car models irrespective of size, we will benefit from economies of scale, thus boosting our competitiveness.”

Mertens added, “With lower costs for development and parts designed to be shared by all our models, there will be more capacity left for focusing on individual details that are important to our customers.”

The “previous owner” he mentioned is presumably Ford. It does sound like Volvo is taking a page from that company’s playbook, however, creating something of a “One Volvo” approach to products.