Real Economy News in Real Time
R/€ = 15.99 Change: -0.02
R/$ = 13.31 Change: 0.03
Au 1312.57 $/oz Change: 6.14
Pt 956.50 $/oz Change: 8.50
 
 
Real Economy News in Real Time
R/€ = 15.99 Change: -0.02
R/$ = 13.31 Change: 0.03
Au 1312.57 $/oz Change: 6.14
Pt 956.50 $/oz Change: 8.50
 
 
BACK

Volvo Car SA expecting big change in EV perceptions in coming years

8th September 2017 BY: Irma Venter
Creamer Media Senior Deputy Editor

Volvo Car South Africa (VCSA) MD Greg Maruszewski is confident the local arm of the Swedish group will be able to thrive under its parent company’s new powertrain policy.

Volvo announced last month that all new cars launched globally from 2019 onwards will be partially or completely battery-powered. The announcement signalled the end to Volvo vehicles featuring only an internal combustion engine.

Advertisement

It also means that every new Volvo launched in South Africa that debuts globally from 2019 onwards will either be an electric vehicle (EV), a plug-in hybrid (PHEV) or a 48-volt mild hybrid (MHEV).

“The perception exists that Volvo will introduce only EVs from 2019 – this is not true. Hybrids will make up a large percentage of the sales mix,” says Maruszewski.

Advertisement

He says the Swedish group’s decision was driven by increasingly stricter global emissions legislation.

VCSA currently sells only one hybrid in South Africa, the XC90 T8 twin engine, which offers a 35 km range on its electric drivetrain alone.

Around 10% of XC90 sales in South Africa are hybrid models.

“This model has a sports mode too. It offers all the driving pleasure of a normal car, while cutting costs when operating in electric mode. “Customers should realise significant savings through the use of hybrids and EVs. EVs are even cheaper to run and maintain,” explains Maruszewski.

He says the S90 T8 hybrid is under consideration for the South African market.

Maruszewski adds that any new global model introductions from 2019 onwards, which will then make their way to South Africa shortly after their global debut, will include three types of models: MHEVs, PHEVs and full EVs.

“We believe customers’ perceptions and awareness around hybrids and EVs will improve in the next two to three years, especially as brands such as Tesla move to the mainstream,” he adds. “EVs’ range will also improve significantly.”

Volvo plans to have a million electrified vehicles on the roads by 2025. (The term ‘electrified’ includes electric vehicles, MHEVs, regular hybrids and PHEVs.)

Maruszewski is confident electrified Volvos will be able to thrive in South Africa.

An electrified Volvo can be charged at a normal wall plug, he says.

“There is no need for a fancy wallbox. We have cables of up to 8 m in length to make it even easier.”

Maruszewski says VCSA has requested the Department of Trade and Industry to scrap import duties on all EVs, in light of their zero-emission status.

“Any cost benefits derived from such a move will go straight to our customers,” he notes.

Maruszewski is equally positive that Volvo’s new series of hybrids will be able to make use of South Africa’s Euro 2-standard fuel, as opposed to the much cleaner fuel available in Europe.

Dealer Shake-Up
Maruszewski acknowledges that VCSA’s 21 dealers will have to change their business operations substantially in order to deal with Volvo’s new powertrain strategy.

“While most of our car parc will still be normal internal combustion engines for the first three to four years post-2019, our service technicians will have to be prepared for the change.

In the long run, our dealers will also need to find different sources of income, especially as EVs do not require much maintenance.

“We are looking at the possibility of dealers taking on business such as wind screen and small dent repairs.”

VCSA has made a successful U-turn in the local market, says Maruszewski.

The company recorded its best performance in 2006, when it achieved an 8.7% share in the South African premium market.

In 2015, however, this fell to 2.9%.

VCSA’s current segment share is 4.3%, although “this is not yet where we want to be”, notes Maruszewski.

“By 2020, we want to be just under 10% – then double digits after that. We want our share to reflect Volvo’s average share globally.”

Customer satisfaction on the sales side has jumped from the low 70s to 83%. Service satisfaction is at 45.5%.

“Only five out of five counts,” says Maruszewski. “We are still not where we want to be, but both of these indicators are going in the right direction.

“You can’t just rely on product – you need to work on customer experience.”

That said, the new product should, however, provide a welcome push on the sales side, with the new XC60 sports utility vehicle (SUV) to arrive in South Africa in 2018.

A potential big volume seller is Volvo’s all-new XC40 small SUV, a first-time entry for the brand in this segment, set to launch in the local market early next year.

Around 75% of VCSA’s sales in South Africa are made up of three models in equal measure, namely the XC60 SUV, the V40 hatchback and the XC90 SUV.

VCSA traditionally looked after the South African market, as well as the Botswana and Namibia markets. A month ago, however, the company also assumed responsibility for a number of African markets, including Mozambique, Zimbabwe, Zambia, Kenya, Ethiopia, Rwanda, Lesotho, Swaziland, Mauritius, Tanzania, Uganda and the Seychelles. 

EDITED BY: Martin Zhuwakinyu Creamer Media Senior Deputy Editor
EMAIL THIS ARTICLE SAVE THIS ARTICLE ARTICLE ENQUIRY