"Ford plans to shake up Volvo"

[FordBuyer]

The soul of Volvo has been forgotten. Too bad. People have no respect for understated quality anymore.

 

 

Has the Volvo brand been lost in the shuffle? What does the brand stand for anymore...Luxury? Performance? Safety? As you say, understated luxury? Quality? Nowadays just about everyone makes state of art safe cars, many are more affordable, many have equal or better quality, and both GM and Ford have many more dealers nearby to take care of you. In Metro Detroit, Volvo dealers are few and far between. What statement does one make driving a Volvo? What message is Volvo pushing these days? I sure don't know. BMW is a "driving machine." What is Volvo. I really don't think new generations coming up know what Volvo stands for. Again, it's getting lost in the shuffle and needs new marketing program to tell us what Volvo stands for. Volvo has the potential to become a huge distraction for Ford and a negative one to be sure if sales don't pick up or at least stabilize.

 

Looks to me like Ford is going to have to dump Volvo in next few years no matter what. Ford needs razor sharp focus on Ford Motor and no distractions in order to survive in very difficult market with nothing but headwinds for foreseeable future. Too bad Ford didn't sell Volvo with LR and J when it had the chance. I'm afraid Volvo is seen as old fashioned brand for older drivers just as 500/Taurus is seen on Volvo chassis no matter how competent. Competent, bland recognition doesn't make money.

[zipnzap]

Has the Volvo brand been lost in the shuffle? What does the brand stand for anymore...Luxury? Performance? Safety? As you say, understated luxury? Quality? Nowadays just about everyone makes state of art safe cars, many are more affordable, many have equal or better quality, and both GM and Ford have many more dealers nearby to take care of you. In Metro Detroit, Volvo dealers are few and far between. What statement does one make driving a Volvo? What message is Volvo pushing these days? I sure don't know. BMW is a "driving machine." What is Volvo. I really don't think new generations coming up know what Volvo stands for. Again, it's getting lost in the shuffle and needs new marketing program to tell us what Volvo stands for. Volvo has the potential to become a huge distraction for Ford and a negative one to be sure if sales don't pick up or at least stabilize.

 

Looks to me like Ford is going to have to dump Volvo in next few years no matter what. Ford needs razor sharp focus on Ford Motor and no distractions in order to survive in very difficult market with nothing but headwinds for foreseeable future. Too bad Ford didn't sell Volvo with LR and J when it had the chance. I'm afraid Volvo is seen as old fashioned brand for older drivers just as 500/Taurus is seen on Volvo chassis no matter how competent. Competent, bland recognition doesn't make money.

 

A large part of the problem is price for content. Aside from the lack of updates, sales are starting to slip because people are not getting the competitive content that the other luxo brands offer, compared to the price. This is largely due to the exchange rate. Another thing is that the exchange rate hurts whatever income or profit they do make. Volvo had record sales last year. They need to build NA-bound models here. This way they can offer more content at competitive prices.

Edited August 17, 2008 by zipnzap

[rmc523]

A large part of the problem is price for content. Aside from the lack of updates, sales are starting to slip because people are not getting the competitive content that the other luxo brands offer, compared to the price. This is largely due to the exchange rate. Another thing is that the exchange rate hurts whatever income or profit they do make. Volvo had record sales last year. They need to build NA-bound models here. This way they can offer more content at competitive prices.

 

I think that's a major part of the problem, not enough 'bang for your buck', and that comes partly from exchange rates. I think Ford's globalization will make it feasible for Volvo to produce their vehicles alongside Ford vehicles in the US, since platforms will be shared.

 

Another problem is design, it's not changed enough over the past several years (see my next post for my version of a Volvo shakeup).

Edited August 17, 2008 by rmc523

[wish4newstang]

fact of the matter is, Ford got everything they needed out of Volvo. its time for Volvo to go. Here in central New jersey what is killing Volvo is bmw. The bigger issue for Volvo is, I dont think even Volvo dealers know what do do with them. Almost every Volvo dealership is couples with other high end makes, Jag, Audi, and the like. Seems t me the only ones buying Volvo are the ones who alwayd bought Volvo. That is the biggest problem, no new traffic. Again my vote would be for Ford to concentrate on thier core buisness. just my thoughts

[rmc523]

The attachment below outlines the lineup (and potential platforms they would be on) I would feature with Volvo. The new lineup covers basically the entire market from small cars (Focus size) to large cars (750 Li, etc size).

• The C class cars stay basically the same, with the addition of the IIRC already coming C30 5-door (named C50 in my list).
  
• The S class cars are basically the same, except everything moves up a size, and the intro of a new S20, which will fill the gap vacated by the S40, but will be slightly smaller than the current S40. The S80 becomes even larger (and moves with the S60 to GRWD) and more luxurious to truly compete with the 7's and LS's of the world.
  
• The V class cars, remain couterparts as they are now to the S class cars and like the S class' move up a size (V50-S40, V70-S60, V90-S80), and add a luxurious V90 to the lineup, while the V70 goes to the S60, instead of the S80.
  
• The XC lineup adds an XC30, which is X3/RDX size, while the XC60 becomes Edge/MKX size. The XC90, now on GRWD is slightly larger than the current model.
  
• New to the Volvo lineup is the XV/XS/M (for minivan) (I'm not sure on a name) minivan class. There are two models here, the XV/XS/M 60 and the XV/XS/M 90. The XV/XS/M 60 fits in between the XC60 and the V90, while the XV/XS/M 90 (on the D4 platform) is a traditional Odyssey, etc. size minivan.
  

NOTE: The heiarchy of all models can be seen on the bottom of the attachment, going from smallest to largest, left to right.

 

The R performance line will be reborn as a true performance upgrade, rather than the appearance package it's become.

Models eligible for R treament are: C30, C70, S40, S60, V50, V70, XC60 and XC90. The S80 may or may not be given the R treatment.

 

The new Volvo will remain more of an entry level luxury company as it is now, while Lincoln (yes, Lincoln) will become Ford's luxury brand (and will expand globally), but Volvo will have a few shots (S80/V90) into the luxury market. It will emphasize fuel efficiency, safety, technology, design, and in so-equipped vehicles (the R models), performance, in the following ways:

• Fuel efficiency:
  -All models will feature an "aerodynamics" option (similar to GM's new XFE package), which will feature more aerodynamic trim pieces, etc to increase fuel efficiency.
  -Ford will share it's hybrid technologies with Volvo.
  -Assuming the C2 can be fitted with a Hybrid option, all models except S60, S80, V70, V90, and XC90 will have a hybrid option (and those are excluded only because they're RWD, and I don't believe Ford has a hybrid application available for RWD.
  -Higher end models will use more lightweight parts, including aluminum and in some cases carbon fiber to reduce weight
  
• Safety:
  -Volvo will continue developing multiple safety features as they have for decades and will equip all models with them as at least optional if not standard.
  
• Technology:
  -Volvo will receive a version of SYNC and Sirius Travel Link to allow it to better compete with other brands who don't offer SYNC.
  -Volvo will utilize all sorts of new technology including some gimmicky stuff.
  -Technology upgrades also include the aforementioned fuel efficiency, safety, and performance improvements as well.
  
• Design:
  -Volvo will undergo a complete change in it's design direction (and I mean a radical departure from current design, not all that dissimilar from what BMW did when they debuted the new 7 in 03; the XC60 concept was a step in the right direction, but not far enough, especially the production model; oh, and it's design department will be headed by me of course :P ).
  -My Volvo may even have a new and/or improved emblem as well.
  -New Volvo products will push the design envelope, while stirring buyer's emotions (ideally in a good way, of course), etc.....
  
• Performance:
  -R models will feature increased horsepower and torque numbers through a variety of technologies, including DI, turboing, etc.
  -R models will also feature suspension, etc. changes/upgrades for improved driving characteristics.
  

Some, or even most US models would/could be built in the US (and possibly exported) alongside their Ford platform mates to reduce costs.

 

Well, there you have it: the new Volvo (or at least my take on it).

I know all of this would be very expensive and could not be done all at once, but seeing as my product plan essentially takes what Volvo has now and builds upon it, my plan could theoretically be done.

Edited August 17, 2008 by rmc523

[retro-man]

Has the Volvo brand been lost in the shuffle? What does the brand stand for anymore...Luxury? Performance? Safety? As you say, understated luxury? Quality? Nowadays just about everyone makes state of art safe cars, many are more affordable, many have equal or better quality, and both GM and Ford have many more dealers nearby to take care of you. In Metro Detroit, Volvo dealers are few and far between. What statement does one make driving a Volvo? What message is Volvo pushing these days? I sure don't know. BMW is a "driving machine." What is Volvo. I really don't think new generations coming up know what Volvo stands for. Again, it's getting lost in the shuffle and needs new marketing program to tell us what Volvo stands for. Volvo has the potential to become a huge distraction for Ford and a negative one to be sure if sales don't pick up or at least stabilize.

 

Looks to me like Ford is going to have to dump Volvo in next few years no matter what. Ford needs razor sharp focus on Ford Motor and no distractions in order to survive in very difficult market with nothing but headwinds for foreseeable future. Too bad Ford didn't sell Volvo with LR and J when it had the chance. I'm afraid Volvo is seen as old fashioned brand for older drivers just as 500/Taurus is seen on Volvo chassis no matter how competent. Competent, bland recognition doesn't make money.

Personally, as an anti-globalist (a cosmopolitan anti-globalist, but an anti-globalist nonetheless) it broke my heart when Volvo and Saab passed out of Swedish ownership - so it doesn't bother me too much one way or the other if Ford unloads them. It would bother me greatly if they sunk afterwards: it would reek of the sort of slash-and-burn capitalism that makes me a critic of globalization.

 

As for what does Volvo stand for: to me personally, what Volvo stands for is represented by the 20+ year string of Volvos I posted that had the same not gorgeous, but not suffering from age either - "timeless" is perhaps a good word - design, and also by this LINK that RJ posted to the Guiness record holder for high mile vehicle - a 1966 P1800 with 2.6 million miles on it. And that beautiful body.

 

A quirk of mine is that I have some things - as many as possible actually - that I use forever - clothes, dishes, consumer goods (e.g. I have a very nice Tube stereo, which may well be the last one I ever own - many days I wear a sportcoat that is as old as I am, and looks great. I recently had it relined). This is partly out of sentimentalism, partly out of anti-consumerism (not good for car companies I know) and the environmentalism associated with it, and partly because they just feel right and I don't care to make friends with a new one. I have never owned a Volvo - but they strike me as that sort of product. Buy one, maintain it, and keep it forever. It doesn't go out of style (at least the kind of Volvos I would have them make), and doesn't wear out as long as you take care of it. High use, low embodied energy, low impact. That's true economy to me. Perhaps not to Big 3 investors.

 

Volvo's tagline should be "The Opposite of Planned Obsolescence" or "The Antidote to the Consumer Society".

Edited August 18, 2008 by retro-man

[Cougarpower]

A large part of the problem is price for content. Aside from the lack of updates, sales are starting to slip because people are not getting the competitive content that the other luxo brands offer, compared to the price. This is largely due to the exchange rate. Another thing is that the exchange rate hurts whatever income or profit they do make. Volvo had record sales last year. They need to build NA-bound models here. This way they can offer more content at competitive prices.

 

I could not have said it before, just because Volvo is not doing well in the states doesnt mean the brand its doing bad since about 33% of Volvo sales come from the States but the other 77% its from the global network and thats about 450k units globally that Volvo sells, the problem with Volvo here in the states its that the customers are not getting a bang "content and power" for the buck they are paying plus Volvo has been hurt with the exchange between the Krona and the Dollar and IMO what Ford should do is build part of the US Volvos here in the states since the majority of Volvos portfolio will share the same platform with its Ford counterpart by 2010-11.Another thing they should rethink for the US is the Volvo -R line, heck put and ecoboost 4 or 6 and retune it as a performance application so Volvo can manage to stand up against Audi S an RS and even theBMW M series.

Jpd80 thanks for spelling this out. To sum up:

 

- Volvo makes too few cars for too little money and requires heavy investment in new models and cost base. Also Ford has asset stripped Volvo of all the best things it had already.... Land Rover kept it going in 2007

I dont know if 450,000 units a year is a few cars.

 

- Land Rover generated all of PAG's profits in 2007, has steady GLOBAL sales in 2008 (despite a recession) and has made heavy investments in environmental tech at the same time (which would be useful at Ford)

Since Ford bought Volvo it was the only PAG brand that consistently was making the profits until last year.

- Jaguar has received billions in investment from Ford, the XF still has a 3 month waiting list and is a long way down the road to salvation.

I dont know if a 3 month waiting list will save Jag buy I wish them the best

So Ford now has to potentially pump billions into Volvo, which it could have avoided if it had sold it and probably would have got a better price for JLR if it had kept it longer. Or alternatively if Ford kept JLR the may actually make stronger profits.....

 

Since Volvo uses the same platforms as Ford EU and soon Ford US this means that Ford will be able to spread the development cost of new products since they can maximize the use of the platforms and reduce the cost of developing new cars so keeping Volvo its easier because the brand its more integrated under the Ford house than Jag or LR that each brand had its own platform and all Ford has to do is stick Volvo in the new 5 year program, at the 3 year a refresh and in the by the end of the 5 year a replacement model because Volvo its using the BMW formula of keeping the car the same for around 10 years but IMO Volvo dont have the luxury to do that in the current market that its putting the pressure on automakers to restyle their cars in shorter periods

[TStag]

A large part of the problem is price for content. Aside from the lack of updates, sales are starting to slip because people are not getting the competitive content that the other luxo brands offer, compared to the price. This is largely due to the exchange rate. Another thing is that the exchange rate hurts whatever income or profit they do make. Volvo had record sales last year. They need to build NA-bound models here. This way they can offer more content at competitive prices.

 

But doesn't that hint a bigger underlying problems at Volvo? The easy comparison is Land Rover. It's also got an ageing model line up now (excluding the LR2). They also have had a strong domestic currency to worry about and they make all their cars in the UK. Yet Land Rover made lots of money last year and Volvo (with twice the volume) lost lots of money. Volvo should have had record sales last year because they launched the high volume C30, but that's not doing anywhere near as well as it should. It's becoming Volvo's X type. Essentially Volvo is trying to sell cars in high volumes but with tighter margins than say someone like BMW, Mercedes, Audi or Land Rover. That's why Land Rover can make half the number of cars and generate $600 million in profit.

 

Volvo may be about saftey and reliability but consumers can get that in any car. They may as well buy a Ford as it contains Volvo content anyway. Consumers spending this amount of money on a car want fast and cool cars. Volvo in Europe is about as cool as my Dad's slippers. It's problems are significant now. Ford has mounting problems with Volvo that will take a lot of time and money to fix.

[Deanh]

But doesn't that hint a bigger underlying problems at Volvo? The easy comparison is Land Rover. It's also got an ageing model line up now (excluding the LR2). They also have had a strong domestic currency to worry about and they make all their cars in the UK. Yet Land Rover made lots of money last year and Volvo (with twice the volume) lost lots of money. Volvo should have had record sales last year because they launched the high volume C30, but that's not doing anywhere near as well as it should. It's becoming Volvo's X type. Essentially Volvo is trying to sell cars in high volumes but with tighter margins than say someone like BMW, Mercedes, Audi or Land Rover. That's why Land Rover can make half the number of cars and generate $600 million in profit.

 

Volvo may be about saftey and reliability but consumers can get that in any car. They may as well buy a Ford as it contains Volvo content anyway. Consumers spending this amount of money on a car want fast and cool cars. Volvo in Europe is about as cool as my Dad's slippers. It's problems are significant now. Ford has mounting problems with Volvo that will take a lot of time and money to fix.

they need to bring back their R models, at least just for some public recognition.....

[NickF1011]

But doesn't that hint a bigger underlying problems at Volvo? The easy comparison is Land Rover. It's also got an ageing model line up now (excluding the LR2). They also have had a strong domestic currency to worry about and they make all their cars in the UK. Yet Land Rover made lots of money last year and Volvo (with twice the volume) lost lots of money. Volvo should have had record sales last year because they launched the high volume C30, but that's not doing anywhere near as well as it should. It's becoming Volvo's X type. Essentially Volvo is trying to sell cars in high volumes but with tighter margins than say someone like BMW, Mercedes, Audi or Land Rover. That's why Land Rover can make half the number of cars and generate $600 million in profit.

 

Volvo may be about saftey and reliability but consumers can get that in any car. They may as well buy a Ford as it contains Volvo content anyway. Consumers spending this amount of money on a car want fast and cool cars. Volvo in Europe is about as cool as my Dad's slippers. It's problems are significant now. Ford has mounting problems with Volvo that will take a lot of time and money to fix.

 

Enough with the Land Rover and/or Jaguar comparisons to Volvo. Volvo is not Land Rover, and definitely isn't Jaguar, thank God. To compare them to one another is silly.

 

Ford had mounting problems with Jaguar and Land Rover which would have taken a lot more money and time to fix. Tata will discover that soon enough though.

[Deanh]

Enough with the Land Rover and/or Jaguar comparisons to Volvo. Volvo is not Land Rover, and definitely isn't Jaguar, thank God. To compare them to one another is silly.

 

Ford had mounting problems with Jaguar and Land Rover which would have taken a lot more money and time to fix. Tata will discover that soon enough though.

yup...and will be interesting to gauge reaction to Land Rovers gas guzzling with the worldwide increase in gas prices....mes think LR may be in trouble....

[TStag]

CougarPower your right Volvo was the only brand making consitent profits. Jaguar made consitent losses. But Land Rover had a period of integration to get through at PAG so you can only really look at Land Rover's profit for the last few years under Ford, which is when they of course turned from being a break even company to a profitable company. It's also important to note that Land Rover has never in it's history ever lost much money. It was profitable under The British Government, BL, BAE and broke even under BMW when it was investing heavily in new plant. Unlike Ford Motor company, Volvo, Jaguar or Aston Martin who have all made big losses in the past at various times in their history. This is important as Land Rover is always conviently lumped in with Jag which in my view was a different company with big issues that they are only now getting a grip on. It's not Land Rover's fault Ford bought Jag.

[TStag]

yup...and will be interesting to gauge reaction to Land Rovers gas guzzling with the worldwide increase in gas prices....mes think LR may be in trouble....

 

Except globlly sales have remained steady dropping back only slightly. By the statment above I guess we can expect a massive rise in Volvo sales thanks to the fact they make smaller fuel efficient cars..... oh no wait a minute their sales drops in the USA are much bigger..... hmmmm Guess if you can afford a Range Rover you can afford the petrol.

[Deanh]

Except globlly sales have remained steady dropping back only slightly. By the statment above I guess we can expect a massive rise in Volvo sales thanks to the fact they make smaller fuel efficient cars..... oh no wait a minute their sales drops in the USA are much bigger..... hmmmm Guess if you can afford a Range Rover you can afford the petrol.

% of customers that can actually afford a 70-80k 4 wheeler that gets 10 MPG's is very small, % is larger with the LR2 but it too drinks like an Irish Chelsea United fan at an open bar....and LR CANNOT live of its first time buyer baby.....sales HERE are WAY down...and what happens here usually trickles down to the overseas market....could be wrong but i do NOT see great things in LR's future....do like the cars ( barring dependability ) but they need an ace up the sleeve fast....and sorry...but i DO wonder how Indian ownership will be veiwed.....same gos for Jag....Volvo needs DESIRABLE product, seems they are being left on the vine a tad....

Edited August 18, 2008 by Deanh

[Ford Jellymoulds]

Whoever turned the back end of the roomy Volvo stationwagon into a mass of christmas tree lights should be shot they ruined it folk stopped buying it in big numbers in the UK at the time it was the start of the slippery slope for Volvo.

[NickF1011]

Whoever turned the back end of the roomy Volvo stationwagon into a mass of christmas tree lights should be shot they ruined it folk stopped buying it in big numbers in the UK at the time it was the start of the slippery slope for Volvo.

 

It was when Volvo started getting away from "the box" design school, if you can call it design. I wouldn't have looked at a Volvo twice if they stuck with that direction. It's time to evolve again, but it was a definite improvement.

[jpd80]

Enough with the Land Rover and/or Jaguar comparisons to Volvo. Volvo is not Land Rover, and definitely isn't Jaguar, thank God. To compare them to one another is silly.

 

Ford had mounting problems with Jaguar and Land Rover which would have taken a lot more money and time to fix. Tata will discover that soon enough though.

Allow me this quick comparison,

1. Ford already shares the jointly developed C1 platform with Volvo and Mazda

2. Volvo developed EUCD for Ford but retains their unique version, the P24

 

I can't see either of these two platforms costing anywhere near the billions in upgrades

that were needed at J/LR, the real problem has always been:

1. Dealer network in North America is rather small restricting sales

2. Potential internal competition with Mercury and Lincoln.

[RichardJensen]

Land Rover has never in it's history ever lost much money.

Prove that statement.

 

Actually, I know for a FACT that you can't.

 

The rest of your assertions are necessarily, 'fruit of the poison tree'. You can't prove your core assertion, and--therefore--the rest of your argument is so much wasted space.

[elkarlo]

Why not team it up with Mazda? It would benefit Volvo in the States and maybe in Japan, where Volvo is kinda strong. While Mazda would gain in Russia and Europe.

[battyr]

Why not team it up with Mazda? It would benefit Volvo in the States and maybe in Japan, where Volvo is kinda strong. While Mazda would gain in Russia and Europe.

 

Would work. Better yet, sell Volvo to Mazda.

[elkarlo]

Would work. Better yet, sell Volvo to Mazda.

 

 

That's so silly it might work, and it would keep it all in the family.

[retro-man]

It was when Volvo started getting away from "the box" design school, if you can call it design. I wouldn't have looked at a Volvo twice if they stuck with that direction. It's time to evolve again, but it was a definite improvement.

Well, I agree with jellymoulds on this one - but then again, he's a Retro-man too: His fondness for the old Ford Cortina (which I like a lot too) has not escaped my notice. Now if I could just get him to stop piling on my friends the Japanese so bad...... I think Volvo has just lost their way. They used to be a niche product with a niche market. All these proposals to make them match everybody with content or performance or price or ... just don't make any sense to me. Start trying to be all things to all people and you'll end up being nothing to nobody. Volvo used to have a soul.

Edited August 19, 2008 by retro-man

[RichardJensen]

Start trying to be all things to all people and you'll end up being nothing to nobody. Volvo used to have a soul.

Suddenly, it's Mazda 1998 all over again, and Jaguar in 2002..... With a company as sprawling and poorly organized as Ford has been, most problems have cropped up at least three or four times.

[retro-man]

Suddenly, it's Mazda 1998 all over again, and Jaguar in 2002..... With a company as sprawling and poorly organized as Ford has been, most problems have cropped up at least three or four times.

Yes, who could forget the "Forduars"? Well .... a lot of people evidently. Absolutely a mistake to do the same with Volvo. If they needed Toyota volumes to turn a profit, they were knocking at the wrong door when they acquired Volvo. What were they thinking?

 

Am I a hopeless romantic? I still believe there is room in the world for cars (and people) with some character.

[TStag]

Just for comparison to Volvo. Land Rover's world wide sales are down a wopping 2.7% YTD (see http://www.economist.com/business/displays...ry_id=11967009)

 

Not bad in a major recession, with a high pound, with a high oil price and an ageing range. Volvo can not match that and this is further proof that Ford sold the wrong part of PAG.