Volvo’s boss has claimed it would be “naive” to expect consumers to flood back into showrooms for petrol or diesel cars after the coronavirus-enforced lockdown is lifted.
Speaking at the recent Financial Times Global Boardroom conference, Håkan Samuelsson labelled the idea of scrappage schemes to subsidise sales of ICE cars “a waste of money”.
“Electrification will go faster. It’d be good to promote new technology – good for governments to support electric vehicles, which are more expensive in the first years,” Samuelsson continued.
He also admitted that weak demand is a bigger issue than restarting production; Volvo’s main plant in Sweden is running a three-day week at present.
“Demand in Europe is around 30% what it is normally, but demand in China is 20% above where it was before the virus. If those signals are right, they speak for a good recovery,” he said. “I really hope this is the case, and anything else will be a disaster for the business.”
The Swede also highlighted the concept of “revenge buying” that is aiding a recovery of sales in the US, whereby consumers fed up of lockdown restrictions are more keen to purchase a new car for a psychological boost.
The crisis has also revealed the issue of sourcing multiple parts from one country, said Samuelsson: “Europe and the US need to have more manufacturing jobs. We need to build cars where we sell them. We can’t rely on China to build everything.”