Saving money has suddenly become a priority.
Volvo has some big decisions to make. The coronavirus pandemic has caused serious short-term economic damage and the auto industry, in particular, is feeling the effects. Sales are down and production has come to a halt in most countries. With radically reduced income, automakers need to trim the fat, as Volvo has just made clear to Automotive News Europe.
"There are thousands of projects with our R&D, and we have to question whether we need to do them all," said Volvo CEO Hakan Samuelsson.
Although he refused to divulge which specific projects are up for possible elimination, the publication speculates previously planned mid-life updates could be delayed as part of those cost-cutting efforts. One example is the Volvo S60, which hit the market in early 2019. A mid-life update could have been scheduled for 2021 or 2022, but it remains to be seen whether or not that'll happen on time.
Volvo was also rumored to be working on a new flagship SUV potentially called the XC100 to compete directly against the Land Rover Range Rover. That too could potentially be put on the backburner. But there are two areas where Volvo refuses to cut back on: electric vehicles and autonomous technology.
These are two fields where Volvo aims to be a global leader and has been making excellent progress on. Why lose that momentum when budget cuts can be made elsewhere? The Volvo Recharge all-electric SUV, based on the XC40, is only the first of a new EV lineup that will likely expand to sedans as well. The R&D projects Samuelsson referenced are, of course, confidential, but now the hard part comes: which to shelve and which to keep going.
It all boils down to priority based on what the competition is doing and whether or not these projects are vital to EV and autonomous tech.