Volvo North America CEO Lex Kerssemakers tells us about the long road to XC90
12:49

Volvo North America CEO Lex Kerssemakers tells us about the long road to XC90

Car Industry
Brian Cooley with Roadshow editor in chief, Tim Stevens. And joining us now it's a real pleasure to have from Volvo their north American CEO of Volvo car's Lex Kerssemakers. Did I get it right? Absolutely. [CROSSTALK] I'm impressed. I feel good. All right. Lex Volvo is in an interesting position right now, with the new S90 really ascending for the first true time into the top level of premium cars. Tell people who are buying S Class and A-8's and seven series why to start buy one of your dealerships. I think what we're aiming for is actually one class lower. It's the A6 and it's the 5 Series and the Lexuses. And what we believe, we are on a journey in the United States. We have been out of sight, out of mind. We have launched the XC90 during last year Is that if you want to be a true premium brand a flag shift [UNKNOWN] should be part of your portfolio. And now we have developed our new platforms, now that we found the right tonality and crisp in our design. So now we believe that we have a true competitor for those, and a true alternative for those. We think, it's about time to switch. Mm-hm, and the XC90 was absolutely one of our favorite cars of the year. It's been a fantastic success from a design standpoint and from a technology standpoint. How do you build on that and then take that import that down to a sedan but maintain the character of both cars? Yeah, of course with the XC90 and this morning we won the truck of the year in the United States to the Hall of Trucks, so Congratulation. Extremely, extremely proud about that. But it's we use absolutely the same ingredients and the challenge is of course to tune that down to a sizeable sedan. And it's the same segment though, but still you need to make a sedan out of it. And you can look at the auto show today, we think, but we're not totally biased That we manage to do a good job, but the platform the driving [UNKNOWN] the infotainment technology it is all copied from the XC90. So let me ask you this Volvo's been making some great cars for some time now. The sort of modern era of Volvo, what has held you back From the gains in market share and really larger scale that you're seeking now, What have been the hurdles that have stood in your way. You probably remember that we used to be part of Ford Motor Company and when we were sold in 2020 we knew we had to start again. So what we have been doing because the platforms and the engines we used from Ford that would come to an end which is logic when you're discontinued. So, we knew in 2010 that we needed four or five years to develop all the new technology. So, we have been a little bit introvert over the past years. We had to focus on developing the cars we are going to roll out now. But with the launch of the [UNKNOWN] 90 and with all the development done, we thought it's now time again to Be in the minds of the customers again, we have been out of sight out of mind. And 2015 was the time to do so, and now that's what you see now as a result. So now, nothing holds us back anymore. To really come back in the United States. I think that's something that most consumers don't realize is that it takes that long to develop a new car. Four or five years is pretty average. Sure. So that's a pretty good example of how long it can take to reboot a brand. But that also means that five years ago you had to be thinking about things like lane keep assists and entertainment systems that would work with your smart phone. How much of that was in the works back then, five years ago, and how much of that has been added in as you've gone along? Yeah, you have to think about it because you can imagine, with those development circles you have to think well ahead. And when we develop a platform or a [UNKNOWN], you need to secure that we embrace all those technologies. Same as with plug in [UNKNOWN] and batteries You see in the Exe 90, there is no batteries, no RTA, despite the fact there is a package for batteries because we could start with a total of new platform, we could do it from the beginning and that's why we have such a fantastic layout. I see a lot of auto makers, to be honest still struggling with their relationship with Apple Carplay and Google Android Auto either technical implementation issues I here there are some business terms issues in terms of who will inform who about future updates to stay in synch. And then there's the idea of who are we letting into our dash? And who are we Offering relationships with our owners and buyers too. What's your philosophy on how you're going to move forward on this? It's very important to our audience in particular. Yeah, we take this a little bit more practical. Okay, we have our embedded systems like road information systems, or music systems. And we allow them into our system like you'll allow an app onto your screen. We have this little bit of flat screen in the car. And we managed to incorporate them in a very, very natural way, but it's still very clear that This is the Volvo system and this is the system from the outsiders. And we leave it literally up to the customer what they prefer to do because that's unavoidable. At the end, the customer will make up his or her mind and We are facilitator in this respect. And you get, if you get usage statistics back and say boy they're basically using car plan in android auto. Is there a path where you might move to a car that offers virtually no Volvo infotainment. The way Hyundai's doing with one of their head units and says we're gonna handle it over the the mobile industry and let them, bring your own to the car. Or is that giving up to much of the Volvo experience? Yes. It does. That sad, though, if you look into current [UNKNOWN] where you get the outside systems in- Yes We managed to do it in a way that is linked to the Volvo/human machine interface, so it still has a Volvo identity, despite it come from the outside. So I think we managed to make a sort of a compromise. So it could well be that the entire automotive industry in five years from now says, you know what? Let us focus on the cars and let other people take Take that part of the business. At the moment, though, we still believe we have too much added value by putting it all as an embedded Volvo system. But, we say no, we have our own system but we facilitate other things to come in. Let's take about autonomy a bit. I was in Gothenburg about a year ago testing out the autonomous driving systems that are gonna be piloted there Next year in 2017. But now in the S90 we're seeing a lot of that sort of functionality coming to the highway already. Can you give me an idea of the differentiation of what's in the S90 and source of autonomous functionality that you're testing this week, currently. As you probably noticed, Volvo is really, really into autonomous drive. It's not, we don't believe in it so everybody can read the newspaper. We belive in it because we have a vision called vision 2020. We don't want anybody killed or seriously injured in a Volvo by 2020. That's quite a thing. Now, you have your passive saftey, you have your active safety But still, despite all this technology, we know that 80, 90% of all the accidents is caused by human behavior. We need to get that out of the system. We can't allow getting all those people killed into the traffic. That's why we see autonomous drive as part of our journey to our vision. And it's a step by step approach. And in the HG90 we introduced pilot assist. Up to 30 miles, you follow the car ahead of you. If you need to connect to another car. With ES90, we now introduce pilot assist as a standard, because we believe this is an integrated part of our journey to the vision 2020, and that pilot assist goes already up to 80 miles an hour. So we just make Step by step we go from semi autonomous drive to autonomous drive. But it's quite a journey to make. It's a journey from a technology perspective, but it's also a journey for the consumer. If we would launch a car now which is fully autonomous, I wonder if this society is ready for it. We have to take it step by step. And that's what we are following. And that's this driver assist in the S90, is for us an extremely important step. And by that, we're also the first car manufacturer who makes it standard. The technologies that allow driver assist, and partial autonomy to happen, are largely chip based, and software, and It's relatively commodity. Compared to many systems 50, 60 years ago where it was metallurgical engineering with an edge that was harder to copy by a competitor. How much of an edge and for how long can you get with self driving innovations or do they evaporate just that quickly every year? Yeah, it's. Technology development goes very fast. And it's not only Volvo of course, everybody is talking about autonomous drive. So we operate in an environment where we know everybody is joining that track. And we don't see it though, and I'm coming back, and it sounds a little bit idealistic but At the end, we believe we need to come to a better society where people just stay alive in cars, so at the end it doesn't matter. And we see it as sort of a marathon, not as a sprint. If somebody goes a little bit faster on this area, at the end, we have our vision. We have a vision that autonomous drive is part of a driving experience. We don't believe though that you should give up your driving pleasure. At the end, it's a button and steering wheel, which says no I go autonomous. Because I, when I look on the Internet, I see a lot of dialogues. I want to continue driving my car. I don't believe in it. No, we don't need to have that description, it's totally obsolete. And that's like you said before, that's trying to rush the consumer as well. Exactly. Too fast. And, I want to continue to drive, but if I'm driving into New York, into Los Angeles, When the speed is 30 or 40 miles per hour, nobody gets any excitement out of that. So that is when you push the button and you say, I'm going semi-autonomous now. If you are getting excitement out of that, then probably you are the exact kind of person who needs to put your car on. [LAUGH] You've got the road rage scenario Exactly. In terms of the design line that we're seeing now, the cars look absolutely fantastic. Can you walk me through where the heritage of all that's coming from? Where exactly is that language coming from? And what sort of things can we look forward for coming from that language? It's very Scandinavian. Now we are the only Scandinavian brand, so we can fully explore on this Scandinavian design language. [INAUDIBLE] is all about simplicity and only putting there the things which are necessary. And you see that on the inside, but you also see it on the outside. And we, the design team, and we have rockstars as designers. Because that's where it starts with, very creative, but they need to give them the environment and the framework from engineering to do so. Because we could develop a new platform. We could develop a platform which facilitates beautiful cars. Short overhangs, the right dimension, the right stance, and that is a fantastic starting point for design. Put a flavor of Scandinavian design over it, that combined with rock stars of designers, and that's what you get. I always like to ask this of our industry guests. Tell us about the Volvo you're driving right now. At the moment I'm driving a V60 Polestar, our high performance part of the run. Mm-hm. We got a sporting driver amongst us. And, but I'm a product guy, so that's what I'm driving. Is there any hope of more Pull Star edition cars in the future here in the US. As you know, we now acquired all the rights to Pull Star. It's an integrated part of the product portfolio. And without releasing too much, but absolutely we're going to bring more four star cars. [LAUGH] You didn't buy that to bury it, clearly. No, but also it's about the timing. At the end we want to be an environmental brand and as we have our business in order now with our basic four cylinder turbo engines and electrification, we offer highly efficient cars And I think then you can have a part of the company which is rewarding and indulging a little bit with high performance cars. It doesn't bite. And believe me, in the future, also the Pulstar brand will reflect The Volvo philosophy of electrification and highly environmental [CROSSTALK] cars. I just want to paint my house that pole star blue. That pole star blue is the best blue. [CROSSTALK] I think it fits very well in front of the driver. [LAUGH] Neighbors, yeah, neighbors love it when you paint your house that color. That's real big. Well, Lex, thank you so much for joining us. It was my pleasure to be here. Than you. Thank you.

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