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Although the rapid growth rate of China's automobile market has basically ended and the market has declined year-on-year for two consecutive years, the luxury brand market has achieved a huge increase against the trend in 2019. In the face of the gradual emergence of domestic luxury brand advantages, Volvo brand once again promoted the flagship model of the domestic plan.

Volvo will replace its flagship XC90 model, according to a news report revealed by foreign media. The document comes from a Volvo parts supplier and mentions that the company's future cooperation projects will include 536US and 536 Chinese models. According to Volvo's internal code rules, the three numbers 536 represent medium and large, third generation and SUV products in sequence, so it is speculated that the model will be a new generation Volvo XC90, which also means that the model will be produced in the United States and China.

In addition, according to previous reports, the new Volvo XC90 will be mass-produced in South Carolina in 2022, which is exactly the same as the 536US. Moreover, from a message released by Chengdu Economic and Technological Development Zone in May last year, it was mentioned that "in order to speed up investment attraction, Chengdu Economic and Technological Development Zone will speed up the introduction of Volvo Runshida, Daimler C project, Toyota Asia Dragon, FAW Jiefang New Energy, Volvo XC90 and other projects", which further confirms the authenticity of this news. However, Volvo officials have not commented on the new XC90 as of press time.

It is understood that the Volvo XC90 currently on sale in China is a second-generation mid-term modified model, which was announced at last year's Chengdu Auto Show and sold in the form of imports. The official price is 633,900 - 833,900 yuan. However, considering the import and domestic XC60, there is not much advantage in price positioning, so it is speculated that it is difficult to open the gap in pricing for the domestic XC90. However, with the realization of domestic models, Volvo will also gradually release the terminal price. According to the XC90 universal preference currently imported in the market has reached about 140,000, so I believe that after domestic production, the preferential margin may be expanded again. After all, the realization of domestic production will save import tariffs and transportation costs.

Although Volvo has been using price-for-volume in China to stimulate consumers, Volvo sold only 131,889 cars worldwide in the first quarter of 2020, down 18.2% year-on-year as the epidemic gradually spread to all regions of the world.

Even though Volvo's largest single market in China benefited from the improvement of the local epidemic, most factories have resumed production since March, and sales show signs of recovery, its overseas regions are still affected by the epidemic, selling only 46,395 vehicles in March, down 31.2% year-on-year.

Volvo pointed out that the main reason for this is weak demand in Europe and the United States. Among them, Europe fell by 35% year-on-year to only 24,000 vehicles; the United States fell by 42.7% year-on-year, with a cumulative sales of 5,500 vehicles; and China accumulated 9,600 vehicles, down 16.2% year-on-year, becoming the region with the smallest decline. However, in terms of first-quarter sales, China has not yet fallen the most.

According to Volvo models sold in the first quarter of this year, SUV formation is still its best-selling model, accounting for 67.9% from 60.3% last year, with cumulative sales of 36,930 XC60, 34,268 XC40 and 18,327 XC90.

Obviously, with the localization of the XC90 model, it will help Volvo brand achieve sales expansion in individual areas, as well as sales increase of the XC90 model.

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