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Volvo will re-evaluate all of its ongoing research and development projects and either cancel or delay the ones that aren’t crucial, according to its chief executive. Like its peers, partners, and rivals, the company needs to save money to recover from the coronavirus pandemic that still has the industry’s neck trapped in a vise.
“There are thousands of projects within our R&D, and we have to question whether we need to do them all,” said Håkan Samuelsson, the company’s CEO, in an interview with Automotive News Europe.
He stopped short of citing the projects that could get axed in the coming weeks or months. Automotive News Europe said mid-cycle face-lifts might end up on the back burner to help Volvo reduce its operating costs. The firm recently updated its 90-series models; it’s working on giving its smaller 60-series cars a nip-and-tuck. Unverified rumors claimed the company is also developing two additions to its range: a more stylish evolution of the XC40 tentatively called C40, and a range-topping SUV named XC100 aimed at Land Rover’s Range Rover.
Samuelsson stressed the need to save money isn’t an excuse to spend less on bringing electrified and autonomous technology to the market. The Gothenburg, Sweden-based company wants to become a leader in these two areas, so it’s not taking measures that could delay or cancel the launch of electric and/or autonomous cars.
“No, we will not compromise on our electrification strategy. Electrification is Volvo’s path forward, and we will continue our plans to electrify our product range,” said the brand’s head of strategy, Mårten Levenstam, in a separate interview with Wired. “Electrification is Volvo’s path forward, and we will continue our plans to electrify our product range,” he added. Samuelsson echoed his comments.
Volvo isn’t alone in its quest to save money. Research firm IHS Markit polled 140 companies in the automotive industry between March 30 and April 9, 2020. Only 4% of respondents expect none of their research and development projects won’t be delayed or canceled altogether, and 22% said electric and hybrid technology will take a hit. On average, the companies who participated in the study said they were reducing their development budget for 2020 by 13%, a significant drop that reflects the severity of the ongoing crisis.