(Reuters) - Chinese-owned Volvo Car Group said on Wednesday a sweeping overhaul of its model range over the next five years would propel its long-suffering sales volumes in the United States back above 100,000 cars per year.
Strong growth in China and more modest gains in Europe have helped Volvo grow sales for 16 straight months. However, turnover in the United States, once its biggest market but now eclipsed by China, has been eroding over the past decade.
Volvo, bought by Zhejiang Geely Holding Group Co. from Ford Motor Co. in 2010, said it expected to reach its sales target "in the medium term" and sought to dispel doubts it had a future in the vast U.S. market.
The Swedish car brand is up against much larger luxury rivals at a time when the global industry is shifting to a smaller number of vehicle platforms to exploit economies of scale while offering a broader array of models.
Volvo Chief Executive Hakan Samuelsson believes Volvo can compete with a more focused offering and just one core engine family.
"Volvo is in the US to stay. Not only will we stay, we will prosper," Samuelsson said in a statement. We sold over 100,000 cars a year in the US in the past. Our initial aim is to get back to that level and in the longer term surpass it."
Volvo, which expects to sell only about 60,000 cars in U.S. this year, is seeking to generate enough global sales to support the billions of dollars in investment in new vehicles needed to remain viable in a cut-throat car industry.
Volvo last sold more than a 100,000 cars in the United States in 2007, its best year globally before a sharp downturn hit auto sales across the world as the financial crisis struck. U.S. auto industry sales rose to more than 15 million vehicles last year.
The Gothenburg-based car maker aims to nearly double annual sales to 800,000 cars by 2020 and stake out a claim in a premium market dominated by Daimler's Mercedes-Benz, BMW and Volkswagen's Audi.
Volvo said the plan to revive its U.S. fortunes also included doubling its marketing budget, developing its dealer network to support its new products and bolstering its service business. It has already replaced some top management there.