The automotive market is a tricky one. Trends are constantly changing and models are dropped for various reasons, like slow sales or even a new CEO’s whim. One recent rumor we heard was that Volvo’s introductory sedan, the S40, was heading to the chopping block. That bit of news deserved some investigation.
The S40 sedan will indeed remain in the Volvo lineup for at least three years, but may be dropped from the lineup after that time period. Current plans call for the V50 to remain in the lineup longer than the S40, should the S40 be dropped. Volvo isn’t sure it needs a three-sedan lineup — small S40, midsize S60, large S80 — especially because the S60 and S80 are similar in size. One of the scenarios under consideration is to drop the S40 and have a scaled-down version of the current S60 to cover the market where the S40 and S60 now compete, leaving the upper end to the S80. “This is one of many scenarios,” a source said. “Don’t take it to the bank yet.”
“It makes sense to consolidate because everyone else in the auto industry is consolidating,” said Joe Phillippi of AutoTrends, an automotive consulting firm.
“Volvo doesn’t need three sedans,” Phillippi said. “The new C30 can serve the purpose of attracting younger, less-affluent buyers than the S40 now does. It costs a lot of money to refresh a car like the S40 every five years, though at Volvo it’s more like six years, and money is very important to Volvo and any eventual partner.” The Swedish automaker is owned by Ford but may be sold to help fund the company’s North American turnaround.
“Any new partner may not want to invest the money it would take to support three sedans, which is a very expensive proposition,” Phillippi said.
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