My next door neighbor is one of those classic ‘traders.’ He buys, fixes, drives, fixes, drives, fixes, etc. When the repairs finally get to be too much time and hassle, he sells the car.
I’ve seen a lot of nameplates come and go through his driveway. Hondas and Nissans stay for a while. Range Rovers require constant weekend tinkering. And Volkswagens need more plastics than a Barbie factory. Only one brand has stuck around, for over a decade now: his family Volvo wagon.
Therein lies the tale.
Back in the day, older Volvos were [rightly] known for their long list of standard safety virtues: side impact protection systems, whiplash protection, four wheel ABS disc brakes and traction control. Only an S-Class Mercedes or a few good friends from my home state of New Jersey offered more protection… and both required a lot more scratch.
These Volvos of yore were a lot more than just glorified safety barges. They were luxurious in a way that no Toyonda of the time could touch. The ‘safest car on the road’ was supremely comfortable, with Goldilocks perfect seats and terrific visibility.
These thrones of near-luxury beatitude came complete with CD changers, turbochargers, all-wheel drive and a narrow girth. The combo made the Volvo wagon a favorite for buyers seeking a safe, European-style family car with a modicum of sporting character if they chose their features wisely.
For a while, Volvo stood alone in the marketplace. Throughout the eighties into the nineties, while the Japanese and Americans followed the herd that became the SUV and minivan stampede, Volvo maintained its traditional virtues: a wagon (and sedan) that offered protection, build quality and comfort at a family-friendly price. It was a good bet– that unfortunately gave way to lots of bad bets.
In 1999, Ford bought Volvo. It wouldn’t be fair to say that Volvo had jumped the shark by then. But you could say they’d lost their mojo. Or, more accurately, their competitors had found it.
At the turn of the last century, gas was [still] inexpensive, luxury was trickling down and, worst of all for Volvo, safety regulations had leveled the playing field. The Camry and Accord– once distant pretenders to Volvo’s safety throne– released legitimate alternatives that cost thousands less than the mostly built-in-Europe S60’s and V70’s. Traction Control, standard ABS braking, side-curtain airbags, in-floor frame rails (used to move energy to the car body instead of the occupants) and new design architectures made these mainstream models comparable to the sedan versions of Volvo’s FWD models.
All of these safety technologies that once made Volvo distinct were now found, at least on paper, nearly everywhere else. Ford Tauruses would arguably be worse in the real world of crashes. But in the marketing world of ‘5-star safety’ these types of debates rarely came up. Safety became an increasingly universal trait for midsized and larger cars, and Volvo’s ability to differentiate themselves through this marketing channel became limited.
Still, if Volvo had simply progressed with the times in terms of product quality, the brand might have remained a serious contender. Unfortunately, Volvos were becoming expensive propositions for their soon to be disloyal customers. ABS modules, evaporator cores, severe engine throttle body issues (which required multiple recalls) and bad decontenting choices with the late 90’s S70 and S80 models made virtually all the pre-Ford Volvos high dollar propositions for the automotive novice. The majority of whom represented Volvo’s traditional conservative clientele, who were no longer above considering Toyota, Honda and Subaru alternatives.
The post-Ford 2001 refreshing of the V70 wagon resulted in numerous electrical glitches and transmission issues thanks to a purely mythical ‘lifetime fluid’. All of a sudden, $40,000 Volvos offered transmissions that a firm smooth ka-thunk to a $3000+ kaput. Volvo’s clean competitive advantage gradually became a bit more hazy in the marketplace and J.D. Power reflected this new, less appealing reality when it released sub-par customer retention ratings for the Volvo brand.
By this time, Subaru had gained enormous traction amongst the Volvo crowd by offering cheaper and better made Foresters and Outbacks. In 2002, Volvo unleashed the XC90 into the American market. While the late-the-the-party SUV garnered tremendous sales success, the upmarket vehicle solidified a move away from Volvo’s long-time dominance in wagons.
Despite its brand-faithful, class-leading safety, the thirsty XC was a “me too” vehicle with LOTS of lower-priced competition: SUVs with room, safety and features aplenty. Escapes, RAV4’s, and CRV’s posed a question on the lower end of the SUV marketfor which Volvo didn’t have an answer. “Why do we need to spend more for a Volvo?” At the same time, luxury brands’ compact SUVs crowded Volvo from on high.
Today’s Volvo is hanging in there. Sales have fallen 6 percent in (to 32,578 units) year-to-date, and that’s not good in a healthy car market.
The bigger question is this: What is a Volvo? The revised XC60 crossover is an admirable attempt to recapture the old magic in America’s post-SUV landscape, but the brand’s defenders have positioned Volvos remaining models too high in the price ladder. The chances that Volvo can compete against the established luxury brands are, still, slim.
The term “Volvo wagon” as a phrase synonymous for an entry level luxury offering noted for durability is dead. In the meantime, cars like my neighbors pre-Ford 1996 Volvo wagon are still running strong, giving serious street cred to a brand that really hasn’t lead the field since 2001.
Now what?
The big question is going to be what are the Chinese planning to do with the brand. Given the now low sales in the US, they could try and concentrate on boosting domestic market consumption in China (now the world’s largest). The problem with that is that it would likely move the brand down-market (I am not sure how much the old Volvo had a presence in China to begin with) manufacturing cheaper knock-off looking cars that the Chinese are well known for. It seems that the SUV/CUV market is probably the best avenue for Volvo in the US at least.
The days of stand alone quirky/unique brands, even vaunted Rolls Royce and Aston Martin are part of larger conglomerates. Given development costs it is a necessary evil now necessitating a generous corporate parent. That is the way of the industry these days. We’ll see what happens with Peugeot, but we will soon have 4-5 major automotive conglomerates controlling most of the world’s car production.
From what I recall, Geely’s first inclination was to take Volvo upmarket, with a 7-series competitor at the top of its sales ladder, but Volvo thought such a large, luxurious, fuel-guzzling sedan was counter to their “family” image. The “family” part of their image, though, probably needs to diminish if Volvo aims to survive.
I believe Volvo will likely re-affirm their market presence in the $35,000 to $55,000 range.
The flagship S80 sedan and the C30 will never be repeated until perhaps the next decade, if not ever.
I can see Volvo having a major role in the crossover and SUV segments. It would take a remarkable product for them to become sales competitive in any other niches.
All this quarterbacking of yesterday and tomorrow makes me wonder….. “Why no minivan? Why no upscale version of the Ford Five Hundred or Ford Flex?”
Volvo lost a lot of American buyers for reasons that go well beyond what I mentioned in this article. But those are topics for another story, at another time.
My comment was actually two parts, one whether Geely tries to expand the Volvo name in the domestic market – which they would have to move down market as Volvo is way too expensive for the average buyer. Second what they do to reaffirm their presence in markets Volvo already plays in like the US. Geely, like many other Chinese companies, has been accused of producing products that look substantially like existing and more expensive models. Google Geely GE if that doesn’t look like a Phantom, I don’t know what does. The risk to the Volvo brand name is if Geely tries to exploit it too much domestically and the marque becomes a shadow of it’s former self. If Geely runs Volvo separately without sharing platforms with domestic car’s they could produce unique vehicles again if they can get economies of scale in line.
Automotive history is littered with car companies that delivered good products but still ended up broke. This reality conflicts with our faith that in a good market, a good product will deliver good profits. We like to believe that and when we see a Volvo, a Studebaker, or a Mazda struggle, we see that conflict and lose faith that someone, somewhere is going to save those good companies.
But overproduction is also a market reality. There is not enough market for the auto capacity available. The global market right now can easily shed a dozen car manufacturers and brands and we can still have overproduction.
The horizon shows that this situation will worsen, not only in the auto industry, but in most industries. This is because while the market is available, it has become too easy to use technologies to produce products. With 3-D manufacturing abilities quickly being bought into the marketplace, making stuff will become even simpler. What computers did to data, they will be doing with real hands-on stuff.
It took a heck of a lot of folks to make a Volvo Amazon forty years ago. Today it takes a heck of a lot of computers. Auto production is so automated it requires more robots than people. Today’s new Volvo is made with more precision than any Amazon, and it takes only a fraction of the folks to do it.
So overcapacity is going to be an ongoing problem. Volvo, Fiat, Seat, Mitsubishi, Mazda, the list goes on and on – these companies will continue to feel a squeeze. Nations with auto manufacturing will hold on tight to what they can keep in their countries, check out Australia today – and they may end up with a single manufacturer that gets government subsidies to remain open, but it will take a miracle to keep the number of brands and manufacturers profitable in tomorrow’s world of market overcapacity.
We will be witnessing the closure of a number of famous brands. We are seeing the beginning of an entirely new market reality that will be rocked as hard as the industrial age rocked the agricultural age. I wouldn’t expect to buy a car and also expect that brand to be around in 2030 when it needs to be replaced, if I keep it long term. I wouldn’t expect the world we see around us today, to be like this for my grandchildren.
We all sense these changes and this is a big reason in my opinion why folks are boning up on survival advice, trying to move “off the grid”, buying firepower and unwilling to believe in our public institutions. We see the changes coming yet those we depended upon to buffer these changes are failing to even recognize them and we sense that we are on our own.
GM filed bankruptsy. Chrysler is owned by Fiat which is struggling to find a global market. Ford is in hock up to it’s eyeballs and doesn’t even own their own name. We are 17,000,000,000,000 in debt. The Euro is dead. Sorry, but we just don’t need the storied brands of the 20th Century in the 21st.
It took Studebaker a dozen years to finally call it quits after the writing was on the wall. It took AMC about that long. It took Saab half of that. So unless they can find a new billionaire with a few extra billions and a willingness to blow it on a unprofitable car company, expect a whole lot of little car companies to call it quits.
Yet Subaru is thriving; at Volvo’s expense, largely.
As a big Subaru fan I’ll 2nd Paul on this one.
Subaru has really taken over the market segments where Volvo and Saab used to thrive. 20yrs ago the Middle Class NPR listener purchased a 240, today they drive an Outback or Forrester.
Subaru is a great example of a niche company that never lost its edge. They never gave up on that flat 4 engine. They competed in segments no one else did. They were innovative.
3D manufacturing still has a long way to go before becoming mainstream. It will be a revolution. As it sits, 3D printing is too expensive and the product too fragile to be useful. However, it is speeding up development times (I’ve seen this firsthand).
Cars are still a manpower intensive industry. The “dirty” and risky jobs (stamping, welding and painting) are the ones mostly handled by robots (mostly, because there are some operations that only humans “can perform”). What has changed is that OEMs are not as vertically integrated as they were 30 yrs ago. So most of the parts that are screwed in the line come from a supplier, and they’re ready to go in.
I will not discuss your over production argument as I think you are right on the money. But there are 2 main things that are going to squeeze the small players out of this game: 1) Fuel econnomy / emissions regulations and 2) lack of scale.
Fuel economy and CO2 emissions regulations are forcing OEMs to invest obscene amounts of cash in powertrain and high tech materials technologies while at the same time keep a reasonable price to the customer. From a roughly 10 yrs+ cycle, engines are increasingly being aligned with the whole product cycle -5-7 yrs (depending on the brand). It doesn’t take much to realize that only OEMs with VERY deep pockets (VW, Toyota for example) are the ones that will do fine in this game.
If the OEM lacks the volume to amortize (and profit) from that kind of investment, or is not paired to a big partner as you mentioned, it will be toast. Plain and simple.
I like Volvos, I think they’re much, much nicer than loaded subarus or toyota/hondas. Unfortunately, losing their “safety niche” standing also affected their appeal as a luxury car. When so many people shop based on numbers and perceived status*, its hard to justify a Volvo vs. another euro luxury brand of equal cost. I think this is just as much a reason for their “downfall” as what is mentioned in this article. Too bad, they seem to be less costly to maintain over the long term, which along with heightened depreciation makes them attractive on the used market.
*for a fair number of buyers the perceived modesty of volvos seems to be an asset… hence the ease of movement downmarket
The sad truth is that Volvo went upmarket instead of downmarket during the last 15 years.
In the process, they got clobbered by nearly every luxury brand out there and the non-luxury brands picked up a lot of long-time Volvo customers.
They were chomped at by both sides of the proverbial sandwich.
Have you sat in a Volvo lately? Sit on one — touch the leather and plastics — then look at the MSRP. I don’t care how safe they are, it’s no wonder no one’s buying. And then they take wagons out of the US market. Really?
ALL cars today start from a safe baseline that protects people very well in accidents. Some are obviously better than others, but it’s not quite so much of an issue as it once was.
Volvo wants to think it’s a premium brand equivalent to Audi, BMW, Mercedes. It isn’t. It’s above Subaru (but only since Subaru’s decade long of cost-cutting measures), but just barely.
Sit in an Acura and you can see why Volvos aren’t selling anymore. I’ll take Japanese luxury over Swedish luxury these days for the same price.
Steve,
You hit it right on the mark with your summary about late ’90s pre-Ford Volvos. I had a 1999 S70 (non-turbo) up until last year and I had each and every one of the problems you mentioned: Bad ABS module, broken evaporator core, peeling door panels made of cheap materials, and worst of all, that stupid electronic throttle body. I cannot tell you how many times that S70 frustrated me and my dad with its never-ending list of issues. The throttle body took the cake though.
My 1991 740 (which I still have) has none of the above problems.
That’s funny. I have a 99′ Volvo wagon and an 88′ 740 Turbo sedan as we speak.
The 88′ is already spoken for but until I get my money, I’m going to use it for local commutes.
Ditto. Our ’98 S70 needed all this by 70k miles. Disappointed (I really loved that little tank), we took a bath on it and traded it in for a Highlander.
And there’s mention of Subaru – I just bought an Outback. And the weekend play car is a Saab Aero convertible. I guess I need to stop listening to XMU and find NPR.
I bet if Volvo went to mid-priced reliable boxes again sales would increase. Personally I think even after 8-10 years on the road the XC90 is one of the most classy designs out there. I just didn’t need poor mpg and poor reliability.
Steve,
That S70 was so bad that I vowed to swear off any Volvos made after 1997. I am buying a one-owner 1995 960 wagon soon so I’ll have to see how it fares.
Now my other Volvo, a 1996 850 with a mere 94k original miles, has been nothing but flawless. But I only drive it in the summers, never in rain, snow or salt.
The 960 drinks gas almost as much as a typical pushrod V8 of that time period, However the interiors are gorgeous, and so long as you don’t cheap out on the gas and perform the required maintenance, they can be worth the purchase.
Countless friends and family had Volvos in the 1990s and 2000s, and it was sad to see what happened to their quality. An uncle’s early S80 basically fell apart in five years (with some transmission problems towards the end), and a friend’s early 2003 XC90 had the transmission fail at least twice within the first year – Volvo replaced it with a 2004 model with exactly the same problems!
What were those Volvos replaced with? Toyotas, of course.
I have another relative with an S70, and they are having exactly the issues you describe (and probably more). Granted, the car has almost 300,000 miles, but it seems like a new $800 issue comes up every month.
Yet I guess they must love the car, since they are looking for an XC70 to replace it…
The S70 is a classic example of the engine being better than the rest of the car.
I would bet about $20, even odds, that your relative has a 98′ model. The 99′ and 00′ models have all the cost containment foibles of the 98, but the ETM issues of those later models make them a financial deathrap.
Volvo stopped fixing ETM issues on the later model S70s once they hit the 10 year mark.
It is a ’98. Steven, since she is very attached to the car and wants to buy an XC70 to replace it, which years are best?
98′ is the best.
No ETM, 4-speed auto (no lifetime fluid), and the Haldex AWD is fine so long as you opt for a rotate and balance every 5,000 miles at the local tire shop.
I bought one of these for my mom a few years ago. Great car. It may almost be worth holding onto the other S70 for parts…. but I would just put it online for $1200 and see what happens.
I think Volvo’s issues started after they killed off the 240 at the end of 1993. The 240 series gave owners almost no trouble(from time to time you had to replace the in the tank “helper fuel pumper”(Volvo likes to use an external main fuel pump and an internal helper pump in the tank to help the main pump limit wear)
It sold very well up to the last year made. It outsold and out lasted its replacement(the 740) by a year
The 740s (and 940s) were robust cars too, better in some ways than the 240 (heater core). Of the seven for sale on CL in my area, one has 140K, two have 200K, two have 300K and two have 400K.
Always liked that shade of yellow on the wagons, with the dark wheels. For me it was a nice update of the bright white (or silver) look on the 740 and 240 Turbos, where the paint provided a sharp contrast to the black trim. From the S80 on the boxy look was gone, and so was the edgy Turbo vibe.
Are you sure the 240s outsold the 740s when both were available?
You can peruse this site has a lot of Volvo production figures.
http://www.vlvworld.com/indexframe.html?700/Production.htm
Great site Craig. Wish they broke out the sales by year so I can compare 740/940 ending sales to 240 ending.
Volvo did about 2.7m of the 240 series over 20 years. They did about 1m of the 740/940 over 10 years, all of that having to compete against the 240. Half of the 240 life was sold without a 740 mucking things up so it’s pretty close.
Great piece Steven! I think you really captured the feeling everyone has about Volvo, and given a great explanation for the reason Volvo is in the position it is today.
In addition to many problems (shuffling of owners, lack of their longtime marketplace niche, high prices for what they’re offering, etc.), a big one is their product offerings.
Volvo takes much longer than most other automakers to redesign a model. The current S80 has been on sale since 2006, with minimal changes. The XC90 has been on sale since 2003; though I will admit I still like it. Competitors have had 3 design cycles since then.
Another problem with this is that Volvo doesn’t have the full lineup to support its slow redesigns. Currently, they only offer the S60 & S80 sedans, the XC70 wagon, and XC60 & XC90 crossovers in the U.S. No compacts, coupes, or true flagship-sized sedans.
Only the S60 and XC60 are truly competitive, and even with that they are overpriced. It’s hard to justify a $40,000 base S60 T6 over a $39,000 base C300 4Matic.
I hope Volvo can turn things around, and recapture their specialness.
This is where I think Geely will actually do some good. They understand the stigma a Chinese car would have in the west, and purchased Volvo as a halo brand. With much, much more cash to put into Volvo than the Swedes could, or Ford did, they could help bring out new, more competitive models faster. This is my hope at least.
And I’d have to politely disagree on the S60 T6 vs C300. I spent a few hundred miles driving a C300 4matic a couple weeks ago, and while it was a very nice car, the engine was an absolute dud. Very smooth, but I don’t think I’ve ever driven a vehicle that had an engine that was so unhappy to gain speed. It’s not slow, it just drives like it has a flywheel made of lead, very unsuited to sporty driving. The S60 T6 on the other hand is an absolute screamer. It’s seats are 10x the Mercedes, and it feels far roomier inside. Personally, I think the T5 is the one to get. It feels far faster than the C300 still, has a cushy suspension that’d put any Buick or Cadillac to shame, and they go for more like $31k.
Being a bit player in a mainstream segment would be a death wish for Volvo. They need to figure out how to be unique in a relevant way, like they were before.
Small companies can do well where no one else is playing. Mini is the most famous example. Conventional wisdom would tell you Americans weren’t looking for a $25,000 3-door hatchback but Mini dared to be different and struck a cord with people. Range Rover is doing that now with the Evoque.
The Mini had other things going for it as well, like fun to drive, efficiency and safety. It was the perfect combination of tastes good and good for you too. Of course BMW know how and the brilliant styling have helped here.
As they say in OZ Range Rovers are pure crap but if you want a small stylish luxury crossover what else is there? The GLK? The X3? The new Porsche Macan will hurt them a bit.
Volvo needs to bring out an update of the box look. Something where people know at a glance it’s a Volvo. They should be leaders in Turbo technology.
The inside should look Scandinavian, like they all did before the 850. It should be a very simple and easy to use design, almost anti touch screen. Have real Swedes do it. Good God it’s not like Americans don’t like that aesthetic, IKEA is bigger than ever.
Use materials that make it look like it will last 100 years. Overkill the door closing sound. Those things, plus a 100K powertrain warranty, will take care of any lingering reliability concerns that customers have.
Volvo, like Mini and Land Rover, has iconic imagery that it can crib. They don’t need to copy anyone. The question is could any Chinese exec calling the shots believe this sincerely enough to mobilize the troops?
Remember VW used the Beetle to turn themselves around in the US.
have you sat in a new volvo? their latest interiors are very minimalist and “Scandanavian” looking. much more so than their competitors. IIRC they still have knobs for everything. Nice big ones too.
Mini may prove that niche vehicles can be successful, but calling it a small company is like calling scion a small company. Besides, they’re already making a heady push to expand their lineup. It’s tough to be niche, look at how mazda struggles, how mitsubishi and suzuki have failed…
I don’t know why anyone in their right mind buys a Land Rover. Aside from being atrociously expensive, they have been in the gutter for reliability for God knows how long.
http://www.thetruthaboutcars.com/2013/02/land-rover-and-jd-power/
I will probably get the evil eye from Steve et.al. But I think the article suffices.
They still look like S40 interiors to me, locked in the early 2000s… and claustrophobic. They aren’t old charming, they are old dated. The front and rear glass is too fast, the pillars some of the thickest in the industry. Side glass area is tiny.
Volvo should be leaders in visibility. Put a big chunk of your R&D towards figuring out how to thin out the pillars. Get some of it back the easy way, with boxy styling. “Oh that won’t be safe, what about the new rollover regs?” Bullshit Minis are some of the smallest and safest in their class, it can be done.
Mitsubishi and Suzuki are great example of why it’s so hard to compete in mainstream segments. Me too doesn’t work.
10 years ago the ads said zoom, zoom but the 626/6 said snooze, snooze. Then they went back to basics, for Mazda. Nothing in its class is like a Mazda 3. Drive a CX5 and then go drive anything else, it’s totally unique. They make damn good cars and aren’t struggling the way Mitsubishi and Suzuki are. Those never had a relevant “edge” to go back to, unlike Mazda… and Volvo.
The modern Minis have used engines supplied or co-developed by Chrysler, Toyota and PSA. With Geely’s deep pockets and cooperation with a larger OE, or two, they can find the resources to survive. Minis are nowhere near as BMW as Scions are Toyota.
Nissan turned it around with two unique entries, the ’02 Altima in midsize and the ’03 G in near luxury. Neither was a copy of anything. And then of course there is the Land Rover example.
Not saying it would be easy for Volvo but let’s face it if they don’t do something like I am suggesting they are done. I am also very worried about Jaguar.
VW is a huge and very profitable company but me too products like the new Passat and Jetta are killing them in the US.
A lawyer who works within the business condo I last worked at had a Volvo SC60 or 70. All within the first 20,000 miles it required a new crank, new power steering and a new radiator. One day she showed up in the parking lot with, you guessed it, a new Toyota Highlander. I asked her where the Volvo was. In her best legalese she informed me that she made the dealer, Don Beyer Volvo (a respected DC area Volvo shop), “take that piece of shit back”. That answered my question.
I miss Volvo but I don’t think the space they used to occupy exists anymore – mass market value brand vehicles are too good and the “true” luxury makes have dipped too far down in price for someone like Volvo to stake out a clear claim with safe and high quality cars at a premium.
He tinkers with Range Rovers, not really recommended one of my neighbours drives a RR she will not let her partner touch it she drives it every day, he tinkers with a rusty Falcon he dragged home. You are starting to resemble a Volvo dealer Steve not a bad thing to be in their hayday every retiree in Northern Sydney seemed to drive a Volvo slowly it seemed when I lived there someone made a fortune selling and repairing those, Hardly ever see them in NZ now new ones yes old ones nearly never they were too expensive when new to get traction in the market place.
I’m cautiously optimistic about Volvo’s future for a number of reasons. First of all, watching the recent results of IIHS’ new small overlap crash test — which both the Volvo S60 and the XC60 aced — leads me to believe that Volvo still does things differently with regards to safety than lots of other manufacturers, and that safety can continue to be their niche. To be fair, Subaru’s Outback and Forester did well in that test as well, but cars from Mercedes and Lexus and other ‘premium’ brands did horrible. I really do appreciate the forward thinking of a manufacturer that designs their cars to be safe, period, instead of just designing their cars to perform well in a series of tests, and I don’t think I’m the only one—if only the brand would be able to get this across to consumers…
Volvo will be bringing the V60 to the US soon, there is talk about them bringing some variant of the V40/XC40 stateside, and supposedly they are getting ready to present a new XC90 as well. Right now most of what Volvo offers is pretty large and expensive, and while I think there is still a market for those cars, I think the downmarket move Volvo needs to make is to offer smaller cars for less money—not to decontent their current offerings. It will be interesting to see what the new product offerings will do for Volvo.
I don’t disagree that Volvo had its dark times in the late 90s and the early 00s, but I think they have since rebounded. Their problem right now is winning back the customers that have since defected to Toyota and Subaru, and that isn’t an easy proposition. The Chinese pumping money back into the brand should help them to increase the speed of their development cycle and increase the appeal of some of their more stale offerings.
I don’t think this is enough to build a brand on, but I still think Volvo makes some of the most comfortable cars you can buy. If I had to spend a lot of time on highways, I’d prefer a Volvo S80 to just about anything except an s-class or 7-series.
seats beyond compare
Yes, Volvo seats are awesome.
And sound systems. Probably the most comfortable car I’ve ever driven.
Thoughtful essay, Steve. Essentially, what do you do (in the sense of the owner of a brand) when the market shifts underneath your feet in a way that makes your brand distinctives irrelevant? Every product category is littered with similar stories.
Some, like Apple, manage to reinvent themselves (the post-Jobs jury is still out, in that case, however). Others, like Packard, try to stretch their brand too far and not only don’t succeed, but kill off what remaining brand “good will” they had in the first place. Still others (*cough*GM*cough*Chrysler*cough*) are artificially propped up for a “second chance,” and still don’t succeed.
Companies in many product sectors see China as the holy grail, but are finding that taking an American or European product mindset into the culture there often won’t work without changing the whole value proposition of the product…
No easy answers, and it will continue to be interesting (in the “may you live in interesting times” sense) to watch unfold.
Somebody who lives at the end of my street had one of those yellow Volvo wagons, I never saw it move. The same people had a Peugeot 505 before that also just sitting so maybe that says something. Both of which I got tired of looking at every time I headed home.
My father had a Volvo 240 for years, the first one, an ’86 he kept for twelve until rust began in the rockers and the next one a ’92 he used for eleven years. Ended up replacing it with a nicer but equally dull Crown Vic. Both Volvos just about identical. His job required him to drive long distances so I suppose it was a good choice for a basic, durable, easy to repair car. When I had to drive it I found it as utilitarian as driving something like a taxi or bus, I couldn’t understand how he dealt with that being his only car.
When it comes to the tweed-jacket wearing college professors who used to buy Volvos, a lot of them have bought Subarus – but I think a lot have also bought Priuses, which have become another popular place to put “war is not the answer” bumper stickers.
Volvo died when the 240 died. If it was not for Volvo Penta, their marine division, they would not have even survived the 240 era…
I’d argue that despite industry consolidation there will always be room for niche brands — as long as they offer something truly unique (re: floor-mounted ignition doesn’t cut it). And given the groupthink that pervades the industry, it’s pretty easy to stake out new ground. I’d also suggest that economies of scale aren’t as important as commonly argued. These days you can easily buy pretty much whatever components you need.
Volvo’s problem wasn’t that its core market disappeared — it’s that the brand stopped evolving. Sure, safety features became less of a unique selling point, but so what? There are always new needs that could be met. So what would they look like going forward?
Volvo could carve out a meaningful market by being THE most environmentally friendly brand. For example, hybrid technology applied to AWD has interesting packaging possibilities; Volvo should pioneer them. A growing number of people are bothered by toxic chemicals in automotive interiors; Volvo should be a leader in getting rid of them. The fully recyclable vehicle is in our future; Volvo should make this a priority — and market the heck out of it.
One of the things that AMC’s George Romney showed is the power of taking political stances that reinforce the core attributes of one’s brand. He was exceptionally vocal for an auto exec, e.g., in railing against “dinosaurs in the driveway” as well as the “economic imperialism” of industry consolidation. This one-two punch counteracted two major marketplace biases that had worked against AMC in the mid-1950s: People tended to shy away from 1) small cars and 2) independent automakers.
Volvo should become a relentless champion of efforts to fight global warming. The rest of the industry is so reactive on this issue that Volvo could score serious points — if it walked its talk consistently.
Saving Volvo strikes me as pretty easy — if it had leadership that could transcend industry groupthink. Alas, I’m not seeing any signs that it will.
Very good articIe Steve, I can’t argue with your assessment. I do agree with Dubya though – while there’s much to be critical of, there is also much to be optimistic about:
– The S60 is probably Volvo’s first really competitive sedan in 20 years – certainly much for competitive than the previous S60. The T5 version can be had for as little as $31K and a nice one can be had for $35. Have you priced a loaded Legacy, Fusion or new Impala lately?
– The V60 will come state-side this fall – a very nicely styled wagon.
– I’d anticipate the V40 coming stateside in 15 – another beautifully styled B segment car.
– The new XC 90 will be launched soon – I think it will be as big a hit as when the first version launched.
– The firm’s new Volvo engine architecture (VEA) will soon be available throughout the line.
– We’ll be seeing more Polestar models.
– While I agree that the perception is that US and Japanese models are roughly equivalent in terms of safety, I know from a real world experience that that’s a false assumption – just open and close the door on a Volvo – they really do feel like a bank vault…. There are testaments from first responders world-wide that occupants in a Volvo would not have survived in another car.
Again, I’m somewhat optimistic – and I’d really like to have a black V60 R Polestar……..
Volvo’s problems are: they never tried to make a reasonable small car and they have avoided going back to RWD for too long.
I feel that it would’ve been possible to very comprehensively redesign the 700/900 platform for the S80, given their lack of funds, and end up with a competitive product. Lots of cars have older platforms than we realize, even if they get new bodywork and revised suspensions.
I also think that the 400-series cars, with their communist dashboards and Renault engines, were never going to be competitive here and that their joint venture with Mitsu didn’t result in anything noteworthy (or cheap). The last S40 made with Ford wasn’t much of a bargain, either.
What Volvo needed was a car which could compete directly with Subaru/Honda/Toyota. They were never going to be Mercedes.
How had would it have been to make a decent naturally aspirated 4-cyl?
You might have something there with the RWD, especially if diesels take off in markets like the US. As everyone knows diesels put out a ton of torque, too much torque for most transaxles you see in FWD platform cars. Those have to be small for packaging reasons, especially when the engine is transverse mounted.
In a RWD platform car there is a lot more room for an overbuilt, beefy transmission. You can put all the power through whereas with a transaxle you’d need a torque cut feature to save the transmission.
Large, heavy cars actually need larger displacement diesel engines to meet emissions. Given that situation it’s really a waste to dumb down the output.
I have thought for a while that Volvo need to return to what they were renowned for, namely wagons! They need to understand who buys into their brand identity. Those who like comfort, safety and are innately conservative. Tradesmen, farmers, outdoor types. As has been said things began to unravel in ’93 when 240 production ended. Being environmentally friendly is infact something older Volvos did well, because they lasted so long. This longevity was in itself a big part of their appeal. A new Volvo should be big, the driver sat higher up than ordinary cars, RWD, angular and with vast interior space. Electronic garbage needs to be minimized and an emphasis put on ergonomics and high quality materials. And lets have those big bumpers back!