Volvo sales struggled last year because of continued supply shortages and decreased production. This year, things have improved. Volvo reported 21% year-over-year (YOY) sales growth in July. 

Why the increase in Volvo sales? The biggest seller in their car lineup is the XC60, which should come as no surprise. It has been their best-seller for well over a decade. But XC60s aren’t the primary factor in Volvo’s renewed sales growth. 

Electric SUVs led to Volvo sales growth

The biggest factor in Volvo’s sales growth is its fully electric crossovers and SUVs. These include models such as the Volvo C40 and Volvo XC40. Volvo’s sales also include success with hybrid and gas models such as the XC90 and the XC60. 

The Volvo C40 and XC40 have been big sellers for 2023. The C40 has seen 175.7% YOY sales growth, and the XC40 has seen 27.8% YOY sales growth in July 2023. 

Hybrid and gas options such as the XC60 and XC90 also saw YOY sales growth of 13.5% and 6.1%, respectively. Fully-electric vehicle sales are spiking much more than their gas and hybrid counterparts. 

How the online Volvo sales model is changing the dealership scene

Volvo has announced plans to go to a complete online sales model, much like Tesla. However, it will continue its wholesale model until 2030.

Many customers special order their vehicles through Cartelligent, so they can custom order their vehicle to specific specifications instead of settling for what the dealership has in stock. 

Although it can take months to get a custom order, many car buyers like being able to get the exact features they want on a vehicle instead of paying for options they don’t use or waiting for inventory to arrive. It can also add negotiating power with dealerships who save on insurance and storage. 

Features that drive Volvo sales

The Volvo C40 and XC40 are relatively similar vehicles, but the XC40 has a little more rear headroom and more rear cargo space. Both vehicles have AWD, but the XC40 is slightly slower and has slightly less range. Their 0-60 mph times are within 0.2 seconds, and the ranges are within 3 miles. The differences are very slight. The C40 boasts 100% leather-free interior, which is a selling point that is in line with green all-electric vehicles. The vehicles are difficult to compare, but the XC40 appears to be more “cross-county,” as its name would suggest, while the C40 looks sportier. 

The XC60 and XC90 differ primarily in size. The XC90 has an extra row of seating, making it a three-row SUV. It has a higher towing capacity. Again, the differences between the two are slight but more obvious than between the XC40 and C40. 

Customization is where the biggest differences lie in Volvo models. Colors, materials, and options like a power-operated tailgate or luggage compartment cover will all add to the Volvo sales experience and increase buyer satisfaction. And, of course, there are tech options like Volvo Pilot Assist. 

Future models of Volvo are sparking consumer interest, such as the 2025 Volvo EX30, a small EV revealed in June 2023. It’s meant to compete with automakers like Tesla, a company that is aiming to deliver premium features at an affordable price. 

Volvo sales still unimpressive despite growth

The increase in Volvo sales is good but somewhat expected, with consumer demand for electric vehicles driving new purchases. Volvo still faces price pressures, high interest rates, and supply chain factors that will burden sales in the future. And Volvo’s performance lags behind its competitors. 

Inflation and lithium prices may further reduce profit margins for the company, which will increase the price of the vehicles in a market that is already stressed by high interest rates. 

June’s YOY sales growth was 33%, which may indicate a cooling of the Volvo market. However, the sales growth percentages have ebbed and flowed for the entire year. 

Volvo models aren’t glued to dealership lots this year because Volvo has an EV lineup that is quenching the thirst of new EV buyers who want quality options from a brand they trust. Volvo Cars has a difficult production market to meet consumer demand, but it is reporting positive sales growth.