Leader talks: CEO Alican Emiroğlu on how Volvo is gearing up for the electric future

Alican Emiroğlu is joining the Czech Republic's Volvo office at an interesting time, with the challenges of Covid still very much present and the electric car market evolving. He became the new CEO of Volvo Car Czech Republic last November, replacing long-time boss Šárka Heyna Fuchsová.

Emiroğlu isn’t new to Volvo, however – he’s been with the company for the past two decades in sales management, logistics, and eventually as the Sales Director of Volvo Car Turkey and operations director in the EMEA region. 

We talked to Emiroğlu about Volvo's vision for a sustainable future and the challenges and successes the company has seen in the Czech market as it transitions to electrification.

Turkey is currently one of the most attractive markets, with great growth potential. How are the Turkish and Czech markets different and what do they have in common?

Yes, Turkey is large and attractive to some brands, but on the other hand, in recent years the car market has been unpredictable, literally up and down, for economic and geopolitical reasons. At present, it is probably most affected by inflation.

Although there is traditional local production in Turkey, most of the sales are made by foreign manufacturers, but car registration is subject to high taxation and this limits the further development of the market. This is one of the reasons why Turkey remains the last in terms of number of cars sold per capita in European countries.

Since Volvo cars are not produced in the Czech Republic, what kind of activities do you focus on domestically?

Good question. Actually, we are, we call ourselves a national sales company. So our main activities in the Czech Republic are based on sales and marketing, representing the Volvo cars, and coordinating customer service activities. We also service cars through our retailers and are responsible to secure the brand values, to make sure that brand awareness is out there in the market.

While our main focus is, of course, to sell cars, we also want to improve the perception of the Volvo brand in the Czech Republic. We work on the quality and development of the retailers and premium personal service that deals with our customers directly.   

What is the structure of the local Volvo office setup? Are you staffed locally or do you hire talent from outside the Czech Republic as well?

Well, starting with me, I am a foreigner myself. Right now, we have a total of 28 national sales employees in our Czech Republic office. We have people from different countries working at Volvo – though at the moment I must confess I'm one of only two people who cannot speak Czech. This includes our colleague from the Swedish headquarters who recently joined our team on a temporary basis to learn about the Czech market – but at least I am not the only one who cannot speak the language!

Your main target audience here is obviously Czech customers but you also service the expat community, correct? Who drives a Volvo in the Czech Republic?

The Czech market is, of course, our main priority, but we also have a good marketing and sales program for expats and diplomats, which is actually a well-established and important sales channel.

Here, too, we have had great success with our wide range of SUVs. We excel against the competition with a high share of operating leases, which reflects our slightly different customer structure. Volvo owners in the Czech Republic are often doctors, architects, and lawyers, successful entrepreneurs or even senior managers, to a lesser extent we also succeed in corporate fleets.

You arrived at the Prague office in the middle of a pandemic. How did you find the market and how much impact has Covid had in the car industry in general?    

In the Czech Republic, the industry is recovering well on the customer side. The customer demand is there, and it’s perhaps even improved because some people are worried about public transportation and prefer to have their private cars because of Covid. So that has put even more interest in our business.

But we are still dealing with other Covid-related problems on the production side because certain suppliers from different countries have had to close factories and that’s putting a lot of pressure on the production scale. If the supply issues resolve soon, we should have a record sales year in 2021. 

Volvo has a unique position in that it has started to promote electrification by a large margin over others. How does this strategy pay off for Volvo?

Over the last year, interest in plug-in hybrids has increased dramatically, virtually doubling the share of electrified cars in total sales. But even before that, we were pioneers in this area, by the beginning of this year, more than 230,000 plug-in hybrid cars were in operation on the SPA platform, to which were added other cars on a smaller CMA basis.

Last year, plug-ins accounted for over 30% in the EMEA (Europe, Middle East, and Africa) region, an extraordinary achievement. With this share, we are the leading premium brand in the plug-in hybrid segment in Europe, and last year we started production of the fully electric Volvo XC40.

In the Czech Republic, we managed to sell approximately 10% of PHEV cars last year, which is not as much as in Europe, but even here we are a clear number one in front of all brands.

Are there limits in the Czech market in the field of electromobility development, mainly due to the absence of significant support for the purchase or operation of electric cars?

Volvo’s vision is clear on electric cars. We want to be a fully electric company by 2030 and have zero emissions by 2040. In fact, we’re committed to become a circular business by 2040 – maximizing resource efficiency across vehicles, components and materials. So we definitely believe in electric cars – every new model that we put out on the market is now going to be fully electric. But, of course, there is going to be a transition period when it comes to the Czech Republic. 

The market is very small here at the moment, maybe 2% of the market share in total, but I believe in five years’ time we’ll see a much bigger market for electric cars. But this will depend on incentives. If you look at other countries, the electric cars are mainly subsidized and incentivized by the governments (tax discounts, easy access to infrastructure charging stations) and this has to be in place in the Czech Republic before electric cars can become more popular.

We made a conscious strategic decision to become a fully electric car maker and an industry leader, but we can’t make the transition to climate neutrality alone. We also need governments and energy firms around the globe to step up their investments in clean energy capacity and related charging infrastructure, so fully electric cars can truly fulfil their promise of cleaner mobility.

Do you believe that electric cars are a long-term sustainable solution, or does the future belong to hydrogen fuel cells? Volvo is working on both technologies.

We are focusing on electric propulsion and sustainability. We are committed to a battery electric future and have no current plans to develop fuel cell vehicles. Our plan is to become a fully electric car company because it is critical to both our company becoming more sustainable as well as to our future success. To remain successful and profitable, we need to keep growing. So we are investing in the future to become a leader in the fastest growing segment in the market of premium electric cars.

Our focus next decade is going to be electric cars. In 2040, we want to be a climate-neutral society, which is certainly no small task. Our first fully electric model Volvo XC40 Recharge is now on the market and early next year we are going to have another fully electric model C40 Recharge available.

So our main focus in next year is going to be there. I believe if the Covid-related production and supply problems are finally solved, 2022 will be another record year.