|
By Steve Harper, as discussed with Anne Hope.
December 15, 2008
Ever since the sale of Land Rover and Jaguar to Tata, and the dismantling of the Premier Automotive Group (PAG) earlier this year, Ford has had an issue with how to best to manage its last remaining Premier Brand in Europe, Volvo.
During the troubled times of Jaguar & Land Rover at PAG, it was partly, the continuing profits of Volvo Cars, which financed their product recovery. Unfortunately Volvo itself only had limited capital and physical resources for its own Product Development, and as a result, never completely renewed its own advanced engineering projects, as most of the technical layouts were being provided as Ford platform shared components.
As a result Volvo has been slow to produce a valid ‘co2 aware’ product range for Europe, and with 50% of their sales in the falling US dollar markets, Volvo never reached its much quoted goal of 600,000 units per year. In fact, over the last few years, Volvo has never really managed to sell significantly more than 450,000 cars, which was the same volumes, as they were producing for the 240’s, etc, in their heyday of the 1970’s. Currently their sales volume is down some 45% on the previous month.
However the one advantage of the platform sharing which looks like being Volvo’s saviour, has been that the S40 (C-platform) and the S80 (Euro CD platform) are now being produced in China, at Changan Automotive, Ford’s partner in Chongqing, China.
At last month’s Guangzhou Motor Show, it is believed that Ford and Changan Automotive were in discussions for the Chinese Brand to buy the Volvo Car Brand, which Ford had paid $ 6.95 billion for eight years ago, as now Ford desperately looks to solve its mounting financial problems in the US.
Volvo has plans to further increase its model line up at the Changan plant this year, with the S80L model, which was announced at the Guangzhou Motor Show. Volvo currently plans to produce this model solely for the Chinese Market.
The S80L is a 14cm longer wheelbase version of the S80 executive saloon, with a longer rear door and passenger footwell. It follows the Audi A6L and the BMW 5 Series Limousine into a growing market throughout Asia, where the owners are more often found being chauffeured, rather than driving.
This model, as with the previous S40, has been produced at Changan, with very close collaboration between the teams from Volvo Sweden and their Chinese counterparts in Chongqing, and so the management of Changan Automotive and Volvo Cars already has a working relationship.
Interestingly, during the development of the S80L, considerable market research was carried out upon the possibility of selling the S80L in many other markets. There were some issues raised about a ‘Chinese Volvo’, especially around neighbouring Asian countries, where Chinese products and quality perceptions, are still to be accepted.
But elsewhere in the World, such as the Middle East and the US, the S80L would be most welcome, wherever in had been produced.
The concept of the global car, the great goal of the manufacturers since the 1980’s, is finally taking a new ‘shape’. Today global, especially for (delete the!) premium brands, is about the brand, not a specific car.
So whether it is Bentley’s of Wolfsburg, BMW’s from Alabama, Jaguar’s of India, the modern customer is buying the brands’ core values. Thus a Volvo, whether owned by the Swedes, Americans or the Chinese, is recognized by the Iron Mark & Diagonal Bar on the grille, and the five letters on the trunk lid which spell out the ‘safe’ and ‘dependable’ brand message to the buying public.
Finally, it is Volvo AB in Sweden, who still owns the Volvo name. What Volvo AB sold Ford were the Plant & Facilities of Volvo Cars, and the understanding to use the name.
So the Swedish management of Volvo AB may still have a say in whom the ‘brand’ is eventually sold to. But in these difficult times, the ‘people-centric’ Swedish Brand may have to accept the best offer available, as the consequences would be far more socially and politically damaging.
|
