Tuesday, December 18, 2012

FTFY Files: Volvo

Somewhere in the years leading up to The Great Financial Gaming, Volvos became beautiful.  The stunning and short-lived Peter Horbury-designed C30 coupe and Pininfarinaesque C70 convertible mark the recent beginning of the end of function-over-form Swedish boxcars.  The current fleet challenges Audi for sheer no-gimmicks beauty.

But all is not well in the land of the manic-depressive sun.  Ford's ownership tenure turned edges into curves and shrank staid midsize Volvo platforms to the nimbler, svelter compact Focus-derived C1 chassis but also introduced piggish trucky things to the line.  Current Chinese master Geely Holding is mulling over yet another brand refocusing, at once shaking its head over the slow-moving SUV line while considering a larger, more expensive Volvo sedan for the Chinese prestige market.

This Unhumble Car Czar does not pretend to understand brand perception in China, but does know that what China covets in automobiles increasingly dictates what the rest of the world drives. This is not due to any vast Communist plot, but rather because China continues to modernize and multiply despite baby quotas and has enough bucks in the bank to bolster, buy-up, and just plain make or break faltering established automotive brands. 

The Chinese reverence for the tri-shields of Buick surely saved that once and future iconic American luxury brand as General Motors flamed out under decades of mismanagement, leaving the once-muscled-up but lately unloved plastic-clad Pontiac brand to perish.  Volvo's reputation for solidity and safety earned it adoption papers from the world’s emerging economic powerhouse while the sheer clownishness of the Hummer brand earned it nothing but a one-night flirtation and walk-of-shame into oblivion.

So what to do with a brand with a once-well-loved market identity clouded by a decade of big-box marketing schizophrenia?

#1. Remember your Corporate Memory
As in, “Hey Volvo.  What’s made you special after all these years?”
Well, you are usually more reliable than other European brands, which makes you worth more money than, say, a VW ... and a screaming bargain compared to, say, an Audi.  You usually eschew the inane trendy overcomplications of the trying-too-hard premium German brands, which makes you cost less money than, say, a Mercedes.  You have happy, decades-loyal owners in the multi-million-mile club.  You come up all stars on those government smash-up tests.

In other words, you’ve built solid, practical cars that that make a compelling case for costing a little more than American or Asian snoozemobiles but you’ve never attempted to social-climb with the bleeding-edge bankruptcymobiles.  You've spent your existence plowing your corporate mission into keeping your customers safe while your peers have in many cases depended on lawsuits to reinforce this value.

There will always be a market segment that profoundly appreciates that.

#2: Think about the Future

SUVs are practical for small parts of the market segment.  Their short-lived market stardom was sheer trendiness, but now the only trend-setters driving them around are leftover soccer moms who can’t afford to trade in.  Volvo: Ditch your XC line, and consider ditching all-wheel drive altogether.

You’ll be left with quick, sensible front-wheel-drivers, and their sensible drivers will be better served by modern snow/ice tires when the weather turns truly intractable.  All-wheel drive adds weight that defeats fuel economy and complexity that defeats the long-term cost-of-ownership advantages of a Volvo.  Sensible drivers in sensible front-wheel-drivers simply don’t benefit from it.

Next, bring the V40 to the United States.  It’s your gorgeous C30 with two extra doors and one extra seat, all of which will make it a sales smash this time around if you base under 30k with a turbo four or five rocking 220 HP.  Former compact SUV intenders will snap it up as more of them realize they were just sitting up higher and listing left and right more before. 

Bring the V70 back to the U.S for those who need to haul more stuff or people.  The third-row jump seat should address those buyers who were only buying large SUVs for occasional extra passengers.

Where does this leave the S60 and 80?  Merged, from a marketing standpoint.  Except for the slightly tighter rear seat and trunk, the S60 eliminates the need for the S80.  How’s ‘bout a single sedan that competes in the C/E range for those markets that favor sedans?  Make a wagon out of it in markets where wagons work.

You should be able to accomplish this compact/midsize line strategy with just two platforms, or consider a single scalable platform ala VW.

Meanwhile let the Chinese Volvo market experiment with big executive Volvos if they insist.  Maybe long-wheelbase luxo $200k Volvos will fly off the showrooms in Shanghai some day, but until then just get back to doing what you do best in the rest of the world.