With new corporate overlords installed at Volvo following Geely's purchase of the company, CEO Stefan Jacoby, himself recently arrived at Volvo from Volkswagen, is marching to the beat of a different drum. That beat doesn't include talk of premium branding.
Instead, the new corporate mission is to focus on the unique and "elegant" Scandinavian nature of the brand. The goal of this new brand positioning is to get out of competition with the higher-volume luxury marques like Mercedes-Benz, BMW, and Audi.
How Volvo will tread the line between unique and elegant without being premium is another matter, however. The end goal is to raise sales volumes by more than double to 800,000 cars per year over the next decade. Here in the U.S. that will be a difficult struggle as the still-shrunken market appears to be supporting its primary "premium" competition quite well.
Audi, for example, has posted record profits even as the market slumps, and Mercedes and BMW are steaming along as well. Volvo, on the other hand, hasn't--as Jacoby puts it, "we are at the bottom, looking up." The U.S., despite the recent drop in overall sales volumes, remains a key ingredient in any top-tier brand's success. The question now becomes where does Volvo's new product position leave existing Volvo owners, and whether there's a niche to be carved out of the stressed market for uniquely Scandinavian cars.
Getting back on top in the U.S. presents a huge hill to climb, though with Geely now funding the Swedish carmaker's show, the rise to 800,000 annual units may be powered in part by China's emerging market.
[Autocar]
