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Volvo vows to charge subscriptions only for major updates

Volvo Cars Chief Operating Officer Bjorn Annwall   BMW veered into a public-relations mess this year when it started charging car owners monthly subscription fees to warm their behinds. Volvo Car won’t be making similar moves. “If you are to charge for software updates, it must be a step change in consumer benefit,” VolvoÂ’s Chief Operating Officer Bjorn Annwall said in an interview this month. “We will not ask people who have bought a car for 1 million kronor ($96,500) to pay another 10 kronor to get extra heat in the seat.” While BMW will no doubt have other manufacturers follow in its footsteps — Mercedes-Benz recently started asking buyers of its EQ electric vehicles to fork over $1,200 a year to unlock quicker acceleration, for example — the auto world has started to second-guess just how much money there is to be made from the rise of software within their hardware-intensive business. In a 91-page deep dive into the topic last month, analysts at UBS pegged the total addressable market at $700 billion by 2030. ThatÂ’s no pittance, but pales in comparison to the $2 trillion opportunity they anticipated previously. Annwall sees Volvo generating little additional revenue from software until mid-decade. Only if major upgrades become available — a self-driving mode, for example — would Volvo charge extra. “You donÂ’t have to hold the steering wheel — now thatÂ’s a step change in user benefit.” Annwall was speaking at the opening of VolvoÂ’s new tech hub in Stockholm, where the manufacturer builds software for selling and marketing cars online. The company, which last month unveiled a battery-powered sport utility vehicle to succeed its gasoline-era flagship, intends to cease making combustion cars by the end of the decade. ItÂ’s going to be an uphill push: EVs made up just under a fifth of the companyÂ’s shipments last month. Bloomberg spoke with Annwall about VolvoÂ’s tech efforts, the software issues that have plagued some of its competitors and the ongoing supply-chain issues holding back the industry. Here are highlights from the conversation, which have been edited for length and clarity: Large automakers including Volkswagen have had problems with their car software. Have you experienced similar obstacles? I wonÂ’t hide the fact that we have had some problems with our software in the car as well. But weÂ’ve been good at correcting them fairly quickly.

Volvo Cars laying off 1,300 as it steps up cost cuts

Volvo Cars will lay off around 1,300 office-based employees in Sweden as it steps up cost cutting, the Sweden-based automaker said on Thursday. While an earlier efficiency drive had begun to show results, with Volvo this week reporting a strong first quarter, more efficiency was needed, CEO Jim Rowan said in a statement. "Economic headwinds, increased raw material prices and increased competition are likely to remain a challenge to our industry for some time," he said. The 1,300 positions equate to 6% of Volvo Cars' workforce in Sweden. Rowan told Reuters the group did not yet know how much it would save from the new measures. "We're still working the details through on that," he said in an interview. The company said it had issued redundancy notices for 1,100 employees, while the remaining 200 white-collar positions would be identified following a review of the business across Sweden. It said it also expected to cut jobs and reduce costs across its global operations in the coming months, including its consultancies. Rowan said he could not yet specify where those jobs would be cut, but that focus would primarily remain on office-based positions. "We sell in over 80 countries or so worldwide, so I think there's opportunities for us to become more efficient across the entire network," he told Reuters. Volvo Cars shares were down 3.87% at 0848 GMT.   Earnings/Financials Hirings/Firings/Layoffs Volvo SUV Luxury

Volvo to shake off Ford ties with new platforms, engines

It would seem Volvo is finally getting around to throwing all of Ford's things out of the apartment. Automotive News reports the Swedish automaker is preparing to unleash a range of new engines as well as a fresh platform designed entirely in house. The powerplants include an all-new four-cylinder engine set to bow before the end of this year before arriving in the US by 2014. Shortly thereafter, the world should get its first glimpse at the next-generation XC60, which will the company's first model to make use of the Volvo scalable platform architecture (SPA). US buyers can expect to see that machine on their roads by early 2015.
The next V70 and S80 will also use the SPA, though those models will carry V90 and S90 designations when they hit dealer floors. But that doesn't mean Volvo has completely weened itself off of Ford technology. The V40 will continue to ride on Ford bones until the model's next chassis can be co-developed between Volvo and Geely.