Competition Check - Volvo XC40
The Mercedes-Benz GLA-Class has a new competitor - the Volvo XC40
Volvo has officially revealed its XC40 SUV, which will rival the Mercedes-Benz GLA-Class, BMW X1, Audi Q3 and the Range Rover Evoque in the highly-competitive compact crossover segment.
The XC40 is the first vehicle underpinned by Volvo’s CMA (Compact Modular Architecture) platform. At launch, it gets a 247 horsepower petrol engine and a 187 horsepower diesel engine. Both the units are paired to an eight-speed automatic gearbox, with all-wheel drive as standard. More powertrain options, including ones with manual and front-wheel drive configurations, will be added at a later stage. Notably, the XC40 will also get hybrid and full-electric variants.
On the styling front, the XC40 borrows its cues from the larger XC60 and XC90 SUVs. Inside, apart from the premium design and advanced safety features, Volvo has heavily focused on the smart storage solutions, such as the best in class inner-door storage capacity, a tray underneath the front-seat to put a notebook or a file and a hook on the glove box to hang a shopping bag.
Being said, the highlight of the XC40 is its “Care by Volvo” subscription package. It is basically a simplified version of leasing, wherein the customers will have to pay only a fixed “subscription fee” to own the XC40. This amount will include the maintenance, servicing, taxes and insurance. There is no downpayment or any hidden cost — all you need to do is pay the specific amount every month and then you can use the car hassle-free. As part of the program, Volvo will also offer the owners a digital key, which can be shared with up to three individuals via a smartphone app so that they can use the XC40 without requiring the physical key-fob.
Targeting The Millennials — Should Mercedes Be Worried?
As the GLA-Class, the target customer for the XC40 is the millennial generation, which is showing a clear decline in the interest in buying a car.
This is why Volvo has come up with the innovative “Care by Volvo” initiative. Even though it won’t be profitable in the beginning, the service will attract the youngsters thanks to its simplified ownership process that removes the barriers of insurance, taxes, loans, paperwork and depreciation. The cutesy design, technology like wireless charging (a first for a Volvo), driver-assistance features and the smart storage systems are also intended to entice the upper-class millennials.
In fact, Volvo even strategically planned the launch of the XC40 — holding the press event in Milan, one of the most culturally popular places for the millennials.
Naturally, this is going to be another tough rival for the GLA-Class, which is already lagging behind the X1 and Q3 in major markets. However, the GLA is due for a massive overhaul next and after that, we will have a better picture of how it lines up against the XC40.