"Volvo - they're boxy but they're good," as we were told by ad executives in the 1990 film, "Crazy People."
Since then, Volvo has made cars in other shapes, but its image as a safe car conveyed by rectangular styling remains. Now the company intends to ramp up safety features on new models to enhance and build on that reputation, while adding luxury features that will help Volvo gain a foothold with the growth in that segment, competing with BMW, Audi and Mercedes.
Volvo, a member of the Volvo Car Group now owned by China's Zhejiang Geely Holding Group, after acquiring it from Ford in 2010, is experiencing rising profits, much of it coming from burgeoning demand in China, where sales grew by 34.4 percent over last year.
"We are growing our presence in China and we expect to sell at least 80,000 cars there this year," said Haakan Samuelsson, Volvo CEO.
The growth in the Chinese market helped offset a 10 percent drop-off in U.S. sales. As a whole, the company is forecasting a 10 percent increase in sales over last year.
Volvo's sunny outlook for Asian sales is predicated partly on the presence of three Volvo factories now operating in China.
Overall, Volvo experienced a net profit of 535 million kronor in the first six months of this year, based on performance in China and an uptick in sales in the U.K., Western Europe and Sweden. The profitable start to 2014 showcased substantial improvement over the 778 million kronor loss sustained in the first six months of 2013.
"The first half result is both solid and encouraging," said Samuelsson.
Volvo's rehabilitation in the market will officially get underway with the imminent introduction of a new XC90 SUV, the first vehicle designed under the new ownership structure.
With an eye on the huge Chinese market, Volvo's new owner Li Shufu stressed the need to make the XC90 one half safety-oriented and one-half a luxury showboat. The market for luxury vehicles in China is expected to experience the most growth, as personal wealth in China is on the upswing.
The U.S. market is also key to Volvo's regeneration strategy. Sales in the U.S. dropped to 61,000 units last year, about half of what they were ten years ago. Plans currently call for the new XC90 to be shipped to the U.S. from China, not from Volvo's Torslanda plant in Sweden, which will produce European models. The company is aiming to sell 100,000 vehicles in the U.S. by 2016.
