Adding A Little Legroom To Its S60 Sedan Has Boosted Volvo Sales in China

Volvo's sales in China are soaring.

So far this year, the Chinese-owned Swedish automaker has seen its sales jump 36% in the country.

This is certainly welcome news for a company that has seen its U.S. sales slip 17% this year.

Some of Volvo's China sales growth can be attributed to increased public awareness of the brand, along with an expanding dealership network.

However, what's really moving Chinese Volvo sales could be the simple addition of three inches worth of legroom to the S60 sedan.

For Volvo, the S60L marks the company's entry into the long wheelbase mid-size luxury car market.

This market doesn't really exist anywhere else but China. Mid-size luxury sedans like Volvo's S60, BMW's 3-Series, and Audi's A4 are wildly popular amongst Chinese bureaucrats, young business executives, and a burgeoning middle-class, many of whom are being driven around by chauffeurs.

These customers live in the country's overcrowded megacities, where space is limited and parking infrastructure is mediocre at best. This is why they've turned smaller sedans into downsized limos.

To address this trend, automakers have introduced a slew of long wheelbase versions of their existing models. By adding three inches of legroom to the S60, Volvo can now compete with other long wheelbase "China only" models, like the Audi A4L and the BMW 3-Series Li.

The Chinese preference for the "L" over the regular S60 is dramatic. Since the S60L's introduction last December, it's outsold the regular S60 by the staggering 10,500 to 285. Sales are so lopsided that a Volvo spokesperson told Business Insider that the S60L has "more or less replaced" the standard S60 in China.

The S60L also plays a significant role for the company globally. So far in 2014, Volvo has sold only 27,000 standard S60 sedans in all markets. Meanwhile, the "L" represents roughly 40% of that volume - in just one country.

The long wheelbase sales phenomena is not exclusive to Volvo. Audi has seen sales of its long wheelbase A4L sedan jump 19.5% this year, to nearly 10,500 cars. BMW is also reporting strong sales of its 3-Series Li models. Audi and BMW have also added long wheelbase version of their larger sedans, such as the A6L and the 5-Series Li.

Although Volvo's sales surge in China is significant, the company is still a far smaller operation than VW-Audi or BMW. In the first seven months of 2014, Volvo sold a total of 45,413 cars in China. In that same period, BMW sold 261,919 cars in China. Audi sold 141,520 cars by April.

Nevertheless, the introduction of the S60L has finally enabled Volvo to satisfy an important Chinese market segment.