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How to Save Volvo


In light of political/bailout fatigue, I’m forcing myself to think of other things. Namely, my favorite car company: Volvo.

A 1970’s Volvo 244 DL saved my life when I drove about 50 MPH into a tree. I didn’t walk away, but survived with no lasting injuries. Car people have said that the car literally kept my legs intact (which many cars do not do at such high speeds, especially old cars like that), and therefore saved my life. I’m hoping to return the favor.

RECENT HISTORY

In 1998, the Ford Motor Company bought Volvo to round out its “Premier Automotive Group“, a set of distinctive higher-market brands which were managed somewhat independently of FoMoCo. The other PAG companies were Land Rover, Jaguar, and Aston Martin. Lincoln, in fact, was shifted into this group. The whole idea was that upscale cars have high margins, and Ford could make money on efficiencies while these companies maintained unique brand images. Ford, incidentally, also owns a significant portion of Mazda, as well.

Volvo was the key piece of this group…

Volvo had top-flight engineers, in-house design of most aspects of the car, and carefully-thought-out platform development strategies. In fact, Ford’s current car platforms – C1 (Volvo P1), D3 (Volvo P2), and EUCD (Volvo Y2) – are all evolutions of Volvo’s P2 platform, designed by Volvo (prior to the Ford sale) for the new flagship sedan S80.

Today, several cars, including the Ford Taurus, Ford Flex, and Ford Focus, several Mazdas, and all Volvos, are built on these platforms. In essence, Volvo is the engineering underpinning of one of Detroit’s Big Three 2.5.

VOLVO’S WEAKNESS

But there is a downside: in the process, Volvo’s brand has been diluted. When Ford took over, Volvo had three lines of vehicle, all passenger cars:

  1. S40/V40 – small family sedan, wagon (on a shared Volvo/Mitsubishi platform)
  2. S70/V70/C70 – midsize family sedan, wagon, coupe/cabriolet (S70 was slated to be replaced with the S60 around 2001-02)
  3. S90 – full-size luxury sedan (S80 planned as S90 replacement for 1999)

There was talk of either a minivan or an SUV on the new P2 platform, but no action.

Today, there are seven different lines:

  1. C30 – 2-door coupe
  2. S40/V50 – small family sedan, wagon
  3. S60/C70 – midsize family sedan, mid-size cabriolet
  4. V70/XC70 – full-size semi-luxury family wagon, sport-enhanced wagon
  5. S80 – full-size luxury sedan
  6. XC60 – crossover SUV
  7. XC90 – full-size SUV

See the problem? There are three:

  • Name dilution: What does “70” mean? Or “60”, if it cuts across different lines? Or “XC”, which describes a sports-enhanced wagon (XC70), a CUV (XC60), and an SUV (XC90)?
  • Line dilution: Volvo is a niche maker. While the XC90 was wildly successful, they need to stay out of building intermediate classes like the XC70.
  • Lack of focus: Too many lines which overlap, and face more favorable competitors in almost every market.

SOLUTION

My solution is a back-to-basics approach. Let’s recall that in the 1980s, Volvo started out competing against Volkswagon, Subaru, Peugeot and Saab, and ended competing against Audi, BMW and Acura. Volvo should return to its wheelhouse: competing as the higher-quality alternative to Subaru, Volkswagon, and Saab. Here’s how:

  1. Kill the XC90, S40, V50, S60, and XC70. Keep the C70 as micro-niche sports car, and C30 as entry coupe, S80 as luxury sedan, V70 “upscaled” as luxury wagon, and XC60 as CUV.
  2. Change line nomenclature to put the “S” , “V”, and “XC” after the name, and restore “line integrity.”
    • LUXURY: S80, V70 –> 80-S/V (because they are essentially the same car)
    • CUV: XC60 –> 60-XC
    • HIGH-END CABRIO: C70 –> 70-C
    • SMALL COUPE: C30 –> 30-C
  3. Add a minivan.
  4. There is now an obvious gaping hole in the “family car” area of the market. Therefore, design and release a “New 240” (a la “New Beetle”).
    • Modern car line, with obvious design cues from the classic 240 car.
    • Significantly-retooled S40/V50, but larger.
    • In terms of components and options, it should be a back-to-basics car, less luxurious than recent Volvos. This is a Volkswagon competitor.
    • One key – lots of options like the current C30, including AWD and plugin-hybrid option. The base should be competitively priced against a Saab 9-3 or Volkswagon Passat base models.
    • 240-S and 240-V would not skimp on the safety, but would on “luxuries”.
  5. Advertising: Go back to “Drive Safely” and “For Life” mottos. In an economic downturn, the only reasons people will buy cars are fuel economy and security.

The ad campaign will be back-to-basics, too: drive the New 240’s off the roof of a parking structure, like the old commercials. Have the driver get out. Voice over: “It looks like a Volvo, drives like a Volvo, and saves like a Volvo. Volvo, for life.” Subsequent ads can do the same thing, except with other cars in Volvo’s lineup.

FINAL THOUGHTS

Whether or not Ford sells Volvo is only partially-relevant to this strategy. Ford has truly benefited from Volvo and would be lost without it. I do think Ford would be dumb to sell Volvo, and that a Chinese parent company would be a PR nightmare for environmentally- and safety-conscious Volvo.

In the end, I hope Volvo is saved, if only because it saved me.

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One Response

  1. John says:

    Hi, thanks for writing this article.

    The Chinese could certainly use this!

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Idealink by vijtable is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
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