Volvo will increase its use of shared hardware from across the Geely group as it embarks on a drive to cut costs and boost profit margins with future EVs.
The company has announced plans to work towards an operating margin of 8% – a substantial increase on last year's 5.6% – as part of a wide-reaching strategy overhaul that revolves around growing its market share and increasing its EV mix.
Volvo has already announced 3000 job cuts as part of a landmark £1.4 billion savings drive and now says it will look to leverage its position as part of the Geely group to reduce costs and boost efficiencies in the development of future products – a move that will result in "intensified joint hardware sourcing in collaboration with Geely".
The company's R&D boss, Anders Bell, explained the move to Autocar: "Geely has become a powerhouse, primarily in China, that we can benefit more from than we have been able to historically," which is important as "scale, synergies and sharing" have become so integral to profitability in today's automotive environment.
Bell stopped short of naming any specific opportunities for Volvo to share hardware with its Geely siblings – including Polestar, Lotus, LEVC, Lynk&Co and the eponymous Geely brand – but said: "We welcome finding partners and finding synergies on non-product differentiating areas."
However, he added, this push for synergies will not come at the expense of Volvo's unique positioning and the company will work to ensure its cars remain obviously distinct from those of its siblings.
He said: "There is always this balance of uniqueness and being true to the brand and being true to our customers – we will never give up on that – but also finding collaborations.
"The engineering aspects that made us survive for the last 100 years we need to protect for the next 100 years. That's pretty straightforward: beautiful, Scandinavian design; reliable; high-tech but in a human-centric way. This is still going to be the recipe for successful Volvo cars."
Bell said the new Volvo EX60 – the first car to use the company's new SPA3 modular architecture – will exemplify to this ethos, showcasing "the perfect marriage between electromechanical power, electronics and software" - the last of those being especially important in the context of Volvo's push to be a manufacturer of "fully software-defined vehicles".
He acknowledged the firm's recent struggles in this area, with the EX90 flagship SUV recently subject to a significant round of over-the-air tech updates to address a number of high-profile glitches and bugs in Volvo's new software stack.
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