For the past two decades many of us have witnessed the changes in Volvo as a car company. From being a part of the Volvo truck and car company to being owned by Ford and now it's ownership by China. Over time the one thing we can all agree on is that Volvo has always brought us very cool cars beautifully engineered to be the the safest car on the planet. However, the one thing Volvo has never done well is to market the cars in way that maximized sales in the US. Still we lived with their short-comings and made the brand work.
Today we wake up to see the president of Volvo has left, a member of the board of directors has replaced him and on we go in a new direction which of course everyone claims will be executed as Jacoby had planned. Prior to this change we all had a chance to read the article from Reuters dated 10/02/2012: http://www.reuters.com/article/2012/10/02/us-volvocar-conflict-idUSBRE89105O20121002 and now:http://www.reuters.com/article/2012/10/19/volvo-cars-idUSL5E8LJ23H20121019.
One illustrates the inner conflict that may have driven Jacoby to a health crisis and the other details his removal and now a transition to a new president.
If you read these articles what you see is a company hoping to change quickly enough to adapt to a very rapidly changing landscape in the auto industry. You also see how much conflict there is with this marriage between the Chinese owners and the Swedish board. What you don't hear is what they intend to do for the US market which is one of Volvo's largest markets. Rather what you hear is a focus on China and Europe.
My question is will these changes in Volvo's focus allow it to survive the next two years in the US market where it is beginning to experience a serious slowdown in sales? Others of you have suggested that selling only two models (S60 and XC60) for the next two years may not be enough to keep it in the market, especially given that the cars don't have competitive leases and are not competitively priced with sufficient low financing. I agree. The challenge is more than any one company can meet in the very rapidly and intensely competitive automotive market here in the US and worldwide.
My contention is that it seems very likely Volvo will gradually exit the US market simply because it has worldwide challenges that cannot be addressed in addition to what exists in the US. My sense is that despite what so many of you Volvo geeks talk about in terms of future models, without a serious focus on the US market, all of this talk is just that, talk.
It's clear that Volvo can't make small cars and be competitive with them in the US. Keep in mind, moving forward the cars that remain the mix are the S60 (now beginning to look tired, and definitely not competitive in the lease portion of the market); the XC60 of which the same can be said; the S80 which is rapidly declining in sales in the US; the very tired XC90 which is totally non-competitive in the segment in which it lies (whether it be features, fuel economy and most assuredly leasing); the XC70 which is also slowing in sales (and non-competitive in the leasing arena) and don't forget the C70 now in its last year (sales slowing too) and we all know the S40, V50 and now the C30 are gone.
My contention is that Volvo is very much a questionable, survivable brand in the US given where their focus is now. Is it possible and even very likely that Volvo will go the way of Kodak? Are we witnessing a Kodak moment as this brand struggles to focus? Are their too many cooks in the kitchen? The Chinese, the Swedes and last of all the US? Who will win? Who will survive? No one knows for us, but it saddens many of us who have supported the brand over the years. In the end, there are many days when it seems this brands' worst enemy is the company itself.
Today we wake up to see the president of Volvo has left, a member of the board of directors has replaced him and on we go in a new direction which of course everyone claims will be executed as Jacoby had planned. Prior to this change we all had a chance to read the article from Reuters dated 10/02/2012: http://www.reuters.com/article/2012/10/02/us-volvocar-conflict-idUSBRE89105O20121002 and now:http://www.reuters.com/article/2012/10/19/volvo-cars-idUSL5E8LJ23H20121019.
One illustrates the inner conflict that may have driven Jacoby to a health crisis and the other details his removal and now a transition to a new president.
If you read these articles what you see is a company hoping to change quickly enough to adapt to a very rapidly changing landscape in the auto industry. You also see how much conflict there is with this marriage between the Chinese owners and the Swedish board. What you don't hear is what they intend to do for the US market which is one of Volvo's largest markets. Rather what you hear is a focus on China and Europe.
My question is will these changes in Volvo's focus allow it to survive the next two years in the US market where it is beginning to experience a serious slowdown in sales? Others of you have suggested that selling only two models (S60 and XC60) for the next two years may not be enough to keep it in the market, especially given that the cars don't have competitive leases and are not competitively priced with sufficient low financing. I agree. The challenge is more than any one company can meet in the very rapidly and intensely competitive automotive market here in the US and worldwide.
My contention is that it seems very likely Volvo will gradually exit the US market simply because it has worldwide challenges that cannot be addressed in addition to what exists in the US. My sense is that despite what so many of you Volvo geeks talk about in terms of future models, without a serious focus on the US market, all of this talk is just that, talk.
It's clear that Volvo can't make small cars and be competitive with them in the US. Keep in mind, moving forward the cars that remain the mix are the S60 (now beginning to look tired, and definitely not competitive in the lease portion of the market); the XC60 of which the same can be said; the S80 which is rapidly declining in sales in the US; the very tired XC90 which is totally non-competitive in the segment in which it lies (whether it be features, fuel economy and most assuredly leasing); the XC70 which is also slowing in sales (and non-competitive in the leasing arena) and don't forget the C70 now in its last year (sales slowing too) and we all know the S40, V50 and now the C30 are gone.
My contention is that Volvo is very much a questionable, survivable brand in the US given where their focus is now. Is it possible and even very likely that Volvo will go the way of Kodak? Are we witnessing a Kodak moment as this brand struggles to focus? Are their too many cooks in the kitchen? The Chinese, the Swedes and last of all the US? Who will win? Who will survive? No one knows for us, but it saddens many of us who have supported the brand over the years. In the end, there are many days when it seems this brands' worst enemy is the company itself.
