Crossroads at Volvo

When Mercedes, BMW, Audi have armed their safety gear to their teeth and have individualized labels such as "honorable", "manipulative" and "technology", "security" is obviously not enough to promote Volvo to a real luxury car. Branded.

Whether in the global or Chinese market, Volvo has always been at a disadvantage in its competition with its German counterparts. Now they want to prove that they are doing everything.

On August 23, Volvo executives shouted out a brand new slogan, “People First,” but failed to detail how to beat the opponent by implementing this brand strategy. Even Lexus has always done so. "DesignedAroundYou", perhaps the English expression is more direct, but this is not as simple as Audi's simultaneous development of an extended wheelbase administrative sedan in China. It is necessary to maintain or even increase its share until it reaches sales of 800,000 units in 2020. The radical goal of the car, they have to know how to achieve revitalization in the global market.

Brand Turning In Sweden, there is an embarrassing Volvo advertisement - "Drive it like you hate it" to reflect Volvo's safety and durability. In fact, you can never find Volvo ads that have nothing to do with security. Such advertising designers will certainly be laid off.

Safety has always been the biggest selling point for Volvo, the car brand that started in Scandinavia. However, when Mercedes, BMW, and Audi have already armed their safety gear to their teeth and have individualized labels such as “honored”, “manipulative” and “technology”, “security” has obviously not been enough to promote Volvo’s move to chairman Li Shufu. Its set brand height.

Compared with the above-mentioned imaginary enemy, Volvo has not yet been built into a truly luxury car brand. The most expensive XC90 North American guide price is only 41,000 US dollars, which is equivalent to 300,000 yuan, and lacks a Mercedes-Benz S-class like The flagship car, even the company’s chief executive, Stephen Jacobs, could not deny this.

"Volvo cars need to be more luxurious." Stephen Jacobs said earlier that they will further upgrade the Volvo brand. As part of the reforms, Volvo will look for a clear positioning of the brand. "Volvo has a very good brand foundation, such as safety, reliability, high quality and innovative design. These are all favorable factors for brand positioning. However, the positioning of the Volvo brand must be further clarified."

After more than a year of controversy, Volvo's board of directors tried to reposition the brand with a “human-respect” slogan—to design a car from a buyer’s standpoint, not just to satisfy the engineer’s personal taste. In April of this year, Volvo’s board of directors became Volvo Car. Richard Mondino, the company's vice president of global marketing, said at the brand strategy conference on August 23rd.

In fact, Saab is a typical example of the failure of the so-called “engineer design” in the mouth of Montedoro. This brand, which was born in Sweden with Volvo, pursues independence and individuality. Designers do not care what kind of position and market share the company has. There is no such thing as an ambitious revival plan. This paranoia led directly to Saab’s sustained loss for more than a decade.

Volvo's plan is to take people as the center, proceed from the personal experience of drivers and drivers, and thoroughly understand the car habits of buyers, and carry out product design and engineering research and development accordingly. In the opinion of Menduno, “'human-respecting' brand concept will make Volvo differentiate from competitors and build the most affinity and most humanized Nordic luxury brands based on a deep understanding of user needs while continuing Volvo Car Safety. , reliable and high quality tradition."

However, executives in both Sweden and China have not been able to detail how to defeat their opponents by implementing this brand strategy.

Li Shufu can finally get the S100 he has always wanted. A large luxury flagship sedan with the same level as the Mercedes-Benz S and the BMW 7 Series. There has been controversy over whether to develop this level of models on the Volvo board. Now the Swedes are Convinced. At least to cater to the preferences of Chinese buyers, the integration of the two parties is crucial. Sharing technology without reservation in R&D and manufacturing may be Volvo’s long-term competitive advantage over other competitors.

“The Volvo sedan is well sold in the Chinese market, and its market share is steadily increasing. The company is expected to achieve an annual output of 200,000 vehicles by 2015.” President and CEO Stephen Jacobs said in Gothenburg recently.

The exact result is that in the first half of the year, Volvo sales in China increased by 36% year-on-year to 21,000 vehicles. “We currently set an annual sales target of 50,000 vehicles, an increase of 67% from the sales volume of 30,000 vehicles last year, and the growth rate is twice that of the current market.” Shi Ruixiang, CEO of Volvo Car Sales Shanghai, said, “We have Seven models account for 4.3% of the domestic luxury car market. China has become Volvo’s third largest market in the world.”

However, due to the obsolete models, Volvo's S40 and S80L OEMs from Changan Ford Mazda in Chongqing began to decline in sales this year. In July, the year-on-year declines were 2.36% and 9.66%, respectively, to 0.3 million vehicles and 0.55 million vehicles. Imported models provided greater support in Volvo's sales performance, among which 5156 sold in the first half of the XC60, followed by the new S60 sedan with 2514 units, which was provided by the authorities.

Even if it becomes the third largest market in the world, Volvo’s performance in China is still less than one-tenth of the global market. If the new models cannot be put into production as soon as possible, the medium-term plan of 200,000 vehicles will only be on paper. The delay of the Chengdu factory’s failure to obtain approval from government agencies made Volvo executives urgent.

“Volvo is regarded as a Chinese company in Sweden, but it is attributed to Swedish companies by the reason of its registration.” Shen Hui, chairman of Volvo China, is concerned that this may disrupt the pace of construction and production, according to China’s automobile industry policy. , Foreign vehicle manufacturers must establish joint ventures with Chinese companies before they are allowed to set up factories in China.

On the Chinese map of the Nordic brand, there have been planned up to four construction projects, including an investment of RMB 1.699 billion for the Shanghai Volvo R&D Center Project, a 3.2 billion yuan Chengdu base, a 4.576 billion yuan Daqing factory, and a 3 billion yuan Zhangjiakou engine. Each one has no delay.

At the crossroads, some of the staff from Jiading China, sent to Sweden for training, began to wonder why the Swedes who love horse racing, yachting, and vacations have created many well-known and outstanding companies - Electrolux, the world's largest white goods company, the largest in the world. Bearing company SKF, the world's most sophisticated camera Hasselblad camera, the world's largest home company IKEA.

But compared with the above-mentioned companies, Volvo, which has experienced a transition from a business branch of a large multinational corporation to an independent operating company, has just stood at the crossroads that may lead to success.

Former losses continued, the former parent company Ford has many excuse, due to self-serving, obsessed with the "One Ford" strategy of Ford has long neglected the financial and technical investment in Volvo, often with Volvo's technology to the Ford brand blood transfusion. In addition to the profit of 377 million U.S. dollars in 2005, Volvo lost 39 million U.S. dollars, 164 million U.S. dollars, and 1.465 billion U.S. dollars in 2006, 2007, and 2008, respectively, and the loss amounted to 653 million U.S. dollars in 2009 was slightly narrowed.

According to public financial data, Volvo Car Corporation had achieved a pre-tax profit of SEK 600 million in the second quarter of 2011, an increase of SEK 170 million over the previous year. In the first six months of 2011, Volvo Cars achieved an operating profit of 1.2 billion Swedish kronor. In the first half of the year, the auto sales were 230.746 million, an increase of 20.3% year-on-year.

Volvo, who turned to profitability, eagerly kept his eyes on emerging markets.

“In addition to China, we have also experienced very rapid growth in other BRICS countries, such as Brazil and the Middle East.” Richard Munduno, vice president of global marketing, said, “The most fundamental aspect of Volvo is first protection. Europe and the United States market, and on this basis to enter the developing countries."

In the next five years, China will become Volvo's global production base, and investment in China will reach 10 to 11 billion U.S. dollars. According to the sales plan announced by Volvo, in 2020, the company's global 800,000 vehicles are expected to be 380,000 in Europe, 200,000 in China, 120,000 in the United States, and 100,000 in other emerging market countries.

“The operating condition of Volvo cars has turned from the 'defensive' of the past to the 'offensive' of profit. A small flower that blooms early depends heavily on the business environment around us. At the same time, it is also vulnerable to changes in the exchange rate of the U.S. dollar and Swedish krona and raw materials. The impact of price increases.” According to CEO Jacobs, the current growth and foundation of Volvo cars are still weak.