(Yicai Global) May 25 -- Volvo Group AB [STO:VOLV] accepted the resignations of four high-level executives in the past year, despite April's 38 percent rise in China sales.
The Sweden-based, Chinese-owned automaker has undergone frequent senior management changes since last May, China's National Business Daily reported today.
Fu Qiang, former president and chief executive of Volvo Car China Sales Co., left on May 16, followed by chief operations officer, Liu Yan, 56 days later. Ning Shuyong, vice president of corporate communications at Volvo Asia Pacific, also opted to leave the company in late April after working there for seven years to join Qoros Auto Co. [CH:CRQACZ].
Yi Han, vice president of marketing, applied for a job transfer from Volvo Car China Sales to Geely Automobile Holdings Ltd. [HK:0175] -- Volvo Group's parent -- to oversee management of Geely's new car brand Lynk & Co.
The significant sales growth it has achieved in recent years suggests over-ambitious sales targets are the culprits behind the frequent management turnover.
Volvo sold some 90,000 cars in China last year, up 11.5 percent annually, to win number seventh ranking among all luxury car brands in China, per its annual report from last year. It was the fifth bestselling luxury brand in China in 2014, but its annual sales were around 81,200 then.
Volvo has excelled in driving sales over the past three years, but its rivals have still far outpaced it. As Volvo views China as its second home market this exerted considerable pressure on it.
Sales growth among the top 10 luxury carmakers in China averaged 15.98 percent last year, and Volvo trailing in the second wave. Sales of Jaguar Land Rover Automotive PLC's cars and the Cadillac brand of General Motors Company [NYSE:GM] grew 28 percent and 45 percent respectively, and both passed the 110,000 unit mark.
The company's problems mainly stem from its internal management system, a Volvo source China noted. It is the only company untroubled by conflicts between Chinese and foreign shareholders, but its sales, research and development and management systems fail to assimilate the strengths of the joint venture or the Chinese brand, so the lack of system-building capability is the biggest issues the company now faces, he added.