Volvo S60 vs. S40, This Town Might Not Be Big Enough for the Two of Them
There's been much ado about the demise of the Volvo S60. Magazines and websites alike have passed rumors along of the car's departure after its current run. Hold the phones though, beccause we've heard differently. Seems it's not the future of the S60 that's in danger, rather the S40, though nothing is set in stone. Want more detail? Read on...
Rumors of the Volvo S60's demise have been greatly exaggerated. That's the sentiment we received from several Volvo executives who were asked to comment on recent reports that suggested the S60 might go away - pinched out of the market by an S80 geared to compete with like the BMW 5 series and Audi A6 or an S40 nearly big enough to compete with the BMW 3 and Audi A4. Volvo execs clearly see the logic, but say a new S60 based on the Swede's version of Ford Motor Company's EUCD chassis will soon join its latest S80, V70 and XC70 chassis siblings.
Volvo knows they have a problem with their current sedan strategy though. Gothenburg may be the best at selling wagons, but it knows the sedan market is where the numbers are and admits their sedan lineup needs some adjustment. The S60 and S40, both fine cars, are too close in size and even closer in price.
The S60 has a lot going for it. In its short lifespan, the model has established itself as the top-selling Volvo sedan. That's reason enough not to scuttle the badge. With the second generation S60, Volvo plans to more squarely take on its fellow luxury segment rivals - a hard-fought niche of the market where neither the Japanese nor the Germans will cede market share easily.
It seems the plight of the S40 is direr. It's too small to vie for the S60's spot, but too costly to build the current generation in Volvo's Ghent, Belgium plant where the Euro is strong to then sell in America against competitors like Aud's A3 or higher-spec models of Volkswagen's Jetta.
Ultimately, that'd be the natural movement for the S40. Right now, VW is the only badge playing the affordable European game. While Volvo would rather move its product range upmarket to more profitable territory, sources say the S40 might have a future if cost could be brought into line. There are a few barriers to this plan though.
The S40 is early in its production cycle, and Volvo would have to figure out a way to cut cost. Moving production to another Ford plant that also produces the corporate C1 chassis (P1 in Volvo speak) where costs are lower will only be an option if FoMoCo chooses to hold on to Volvo. Right now, sources say, Jaguar/Land Rover is on the block and Volvo is under review for sale. Until a decision is made on Volvo, expected by the end of the year, moving production just isn’t an option. Should Volvo be sold, that limitation isn't likely to be remedied.