Volvo rolls out cars of future built on common Geely platform

Wed May 18, 2016 12:31pm EDT
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By Helena Soderpalm

GOTHENBURG, Sweden (Reuters) - Volvo showed off its first two concept cars based on a new common platform with Chinese owner Geely on Wednesday, a small car and an SUV it hopes will help secure a firm premium market foothold.

The platform, dubbed Compact Modular Architecture (CMA), is part of Volvo's drive to grow sales and boost profit margins. While these have steadily improved over the past two years, they still lag those of premium carmakers such as Daimler (DAIGn.DE: Quote).

Volvo's proposed new models, both painted white, are a modern take on the Swedish carmaker's distinctive look. It said the new small car range, based on the shared platform, would include a pure battery electric car, in line with a target to electrify all models.

"This (the premium segment) is a growing segment and with this platform we have a great potential to grow, with our ambition to be an 800,000 car-company", Volvo Cars CEO Hakan Samuelsson told Reuters at an event to launch the cars.

"It also plays an important role for our goal to reach one million electrified cars in 2025."

Volvo, which will start producing the new "40" series models in 2017, is a small player in a sector plagued by overcapacity.

Geely and Volvo each sold about half a million cars last year, while world leaders Toyota (7203.T: Quote), Volkswagen (VOWG_p.DE: Quote) and General Motors (GM.N: Quote) sold some 10 million each.

After stagnating under Ford (F.N: Quote), Volvo won a new lease of life after it was bought by Zhejiang Geely Holding Group [GEELY.UL]in 2010, with investment in new models and factories as the Chinese automaker leapfrogged a decade of research and development in its mission to push upmarket.   Continued...

A new Volvo concept car based on Volvo and Geely’s common new CMA platform is presented during the media event in Gothenburg, Sweden, May 18, 2016. REUTERS/Helena Soderpalm