Volvo names 'retail man' Gustafsson to succeed Kerssemakers in North America

Lex Kerssemakers, left, on Volvo's decision to bring in Anders Gustafsson to succeed him in the Americas: "Now is a good changepoint."

Lex Kerssemakers, the Netherlands native who steered Volvo's rebirth in Canada and the U.S. over the past 32 months, is moving on to lead the largest region for the Chinese-owned Swedish automaker.

Kerssemakers, 57, will become senior vice president for the Europe, Middle East and Africa region, which makes up more than half of Volvo's global sales. He will be replaced as head of the Americas, which includes Canada, by the current head of that region, Anders Gustafsson, 48. The changes take effect Sept. 15.

Just as Kerssemakers took the Americas’ helm, as Volvo was in the midst of introducing a flurry of reputation-boosting new products, Gustafsson arrives at a pivotal time. The company's first U.S. assembly plant is set to open next year, providing a new production source for an automaker that has been pinched this year by tight supplies of vehicles such as the top-selling XC90 — so far this year, the automaker has sold 1,492 units in Canada.

Though Volvo still has much to do before reaching its five-year goals for the U.S. established in 2015, Kerssemakers said in an interview that he's also focusing more on industry trends that will affect the brand globally.

Those include mobility, electrification and changing consumer behaviors. In July, Volvo pledged that all new models introduced in 2019 and after would run on electrified powertrains.

By 2020, Volvo expects to break its annual U.S. sales record of 139,067, set in 2004 under Ford Motor Co. ownership. From 2014 through 2016, the automaker increased U.S. sales 47 per cent to 82,724 vehicles. Sales are down 9.2 per cent through July, but Kerssemakers says demand will pick this year with adjusted supply.

"Volvo should sell 150,000 vehicles a year in the U.S. [by 2020]," he said. We're still on that journey, but we have our global challenges. We need to push it to the next level in the next two to three years, together with our retailers."

Canada’s numbers are better so far this year. Sales are up 2.8 per cent to 3,811 through the first seven months of 2017.

After total Volvo sales in Canada were down four per cent at 4,466 vehicles in 2014 when compared with the year before, the automaker surged in the next two years. Sales were up 7.2 per cent in 2015 when compared with 2014 and up 27 per cent year-over-year to 6,103 vehicles in 2016.

WORLDWIDE ORGANIZATION

Volvo separated its global business into three regions in 2015: the Americas (made up of the U.S., Canada and Mexico), EMEA and Asia-Pacific.

Kerssemakers and Gustafsson took on their current roles leading the Americas and EMEA in January and March 2015, respectively. Before then, Kerssemakers, who cut his teeth in product marketing and strategy, led Volvo's product strategy and vehicle line management. Gustafsson oversaw Swedish operations.

"Now is a good changepoint," Kerssemakers said of the timing of the management switch. "We've outlined our strategy for the U.S.; now it's about continuing to fine-tune that strategy."

While Volvo has broadened its U.S. appeal with the XC60 and XC90 crossovers, Kerssemakers hasn't been afraid to experiment with new retail models to find other avenues of growth. One example is the V90 station wagon. It isn't sold on dealer lots but can be custom-ordered online from Europe and distributed through retailers.

"We said, 'Let's try the online exercise'; we just wanted to see how it works," Kerssemakers said of the sales practice at a media event in Denver earlier this month. "We can't just continue to push cars at our retailers."

RETAIL LEADERSHIP

Volvo has seen a nearly steady increase in U.S. and Canadian sales since the introduction of the redesigned XC90 -- the first new vehicle under Chinese ownership -- in 2014. Volvo struggled to meet higher-than-expected global demand for the XC90 in the first half of this year, causing U.S. sales to dip. Sales in Canada are also down 239 units through seven months.

It also plans to begin production at its first U.S. factory -- located outside of Charleston, S.C. -- in mid-2018.

By handing the reins to Gustafsson, Kerssemakers said Volvo is betting its continued growth in the Americas on a long-time retail specialist. Gustafsson has had a connection with the Volvo brand since age 14, washing cars at the Volvo dealership his family has run in southern Sweden for 45 years. He also served as the CEO of Hertz Sweden before joining Volvo in 2009.

"My successor is very much a retail man, he knows exactly what is necessary in a market," Kerssemakers said.

In an April interview with Automotive News Europe, Gustafsson echoed Kerssemaker's call for renewed efforts to revamp the Volvo brand even further, following two years of success.

"Volvo has tried so many times to reach the premium level and now it is there," Gustafsson said. "I am very confident we can stay at this level, but we're going to have to work even harder to try to exceed what we have already achieved."

You can reach Katie Burke at kburke@crain.com -- Follow Katie on Twitter: @KatieGBurke

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