Volvo exec: Look outside for parts

Mark Rechtin, Automotive News

LOS ANGELES -- Volvo Car Corp. has to set aside its pride.

Known for its Swedish outlook and strong corporate culture, Volvo must change in order to get vehicles to market faster, a top executive says.

The vehicles need not become any less Swedish. Rather, Volvo needs to stop thinking it should engineer every piece of the vehicle in-house, says Lex Kerssemakers, 46, Volvo's senior vice president of brand, business and product strategy.

Allowing outsiders to develop mundane components will shorten the time Volvo needs to create new vehicles, Kerssemakers said in an interview.

Whereas the leading Japanese automakers make major changes to their products every five or six years, Volvo changes its products every seven years or more. Simply put, stale products don't sell.

For instance, the S80 has been in the US lineup since Autumn 1998 without a major redesign. It will be redesigned for Spring 2007, for a cycle of nearly nine years.

Volvo should still be at the forefront of creating new safety systems, inline engines or turbochargers. Those are critical components that make a Volvo feel like a Volvo.

But designing, say, a new climate-control system is something a supplier or sister company can do more efficiently, Kerssemakers says.

"There is too much double-work because we don't listen to our suppliers. The supplier may have the solution, but we still want to do it in-house," says Kerssemakers, a Dutchman who has worked for Volvo since 1984.

He says Volvo will increase its r&d cooperation with suppliers and with Ford of Europe and Mazda Motor Corp.

"If you are talented, you always think you do a great job, so there's a hesitancy to copy and paste someone else's work," he says. "But there is no reason I need to put 20 of my engineers on developing a new air-conditioning system."

Shortening development cycles is crucial for Volvo. Expanding its lineup while redesigning existing products has strained the lean automaker's resources.

"We could have had the C30 (hatchback) 18 months ago, but it was a balancing act with developing the XC90 V-8 engine and other vehicles' safety features," Kerssemakers says. The C30 will go on sale in Europe this fall and in the United States in early 2007.

What's more, the current S80 flagship has had too long a shelf life, he says, largely because Volvo has placed its emphasis on developing new vehicles such as the XC90.

Says Kerssemakers: "We need a mind-set change."

From Automotive News (A Crain publication)