April 19, 2024

• 

[THE INVESTOR] Volvo Car Korea, the local importer and distributor of the Swedish automaker, sold a record 6,604 units here in 2017, the company said on Jan. 15. But the sales growth has also brought about a supply shortage, according to industry sources.

Led by the popularity of the XC60 midsize sport utility vehicle, the carmaker’s sales rose 26.9 percent year-on-year to 6,604 units in 2017 from 5,206 units in 2016, the company said. This marks the fourth consecutive year that the carmaker has reaped an annual growth of over 20 percent.

 

Volvo Car Korea’s best-selling model XC60. Volvo Car Korea

A total of 1,555 units of the best-selling XC60 were sold last year, up 70.7 percent on-year, the company said.

Sales of Volvo’s flagship S90 midsize sedan and the XC90 large SUV were 1,377 units and 1,066 units, respectively, accounting for some 40 percent of total annual sales.

Amid growing demand and brand recognition in Korea, customer complaints are also escalating due to a supply shortage of the XC60 SUVs.

Customers who have signed contracts to purchase the XC60 D4 diesel model in October last year are expected to receive the vehicle sometime between April and June this year, the company said.

Drivers who buy the XC60 this month are expected to receive the vehicle by around July.

“We had initially estimated monthly sales of the XC60 to reach a maximum 200 units. But over 1,500 units were sold in the first two months of release. We are making all-out efforts to deliver the vehicles as soon as possible,” said Volvo Car Korea.

As an alternative to the XC60 D4, Volvo Car Korea has introduced the XC60 D5 model, which is up to 2 million won (US$1,880) more expensive than the D4.

Meanwhile, in response to criticism over Volvo Car Korea’s excessive payout ratio to Sweden’s Volvo Car Corp. owned by China’s Geely Auto Group, the local unit has decided on zero dividend payout this year, the company said.

In 2016, critics highlighted the company’s allocation of 3.2 billion won as dividend payouts, more than 12 times its 243.2 million won of net profit, based on data from the Financial Services Commission.

Seeking to sell 8,000 units this year, Volvo Car Korea plans to roll out the XC40 small SUV, which targets female and younger generation drivers, in the second quarter of this year, the company said.

By Kim Bo-gyung/The Korea Herald (lisakim425@heraldcorp.com)