When I first wrote this post, the Volvo sales drop just began to show. Now,in April 2013 it looks more looks like a total collapse. There are a lot of articles about expensive factories, failing sales force etc. However, everyone are lost here. I think they got lost with the brand. And when that happens you are lost with your products, but even worse, you have lost your audience.

The Chinese, just like the Americans, wants to turn Volvo into a luxury brand. For a Swede, it’s like selling a Dell laptop to the price of a MacBook Pro. That is not done over a night. If ever. Volvo is not a Luxury brand. It had a value, but it was based on a non-prestigious smartness, not status.

To me, the challenges Volvo are facing is more or less a brand issue. I fear that the ambition for a premium profile together with the rather “sexy” design of the newly introduced models, actually confuses the customers. And as you will see at the end of this (too) long post, the same thought might have hit Volvo’s board room. But not all of them.

Confusion is never good for business

During my time at¬†Caterpillar Global Brand Management it was often said that the alternative to a good brand strategy spells discount. Gotta embrace that. And that is probably the price Volvo will have to pay after glancing a bit too much on the success for the Bavarian pride BMW. Once upon a time these two manufacturers where similar in size and number. That was long ago. Let’s look back on the history of these two brands – because that’s where they come from and that is what has created their positions.

I’m rolling

The name Volvo comes from latin and means I’m rolling. Which is rather well thought through since SKF were one of the main investors behind the startup. With Volvo they created their own customer. But also it sets the pace of the heart – it’s supposed to roll. Not rock. With their models¬†”Jakob“, “suggan“, 444 PV (pictured below), Amazon and 144 they introduced cars that were highly appreciated¬†for their simplicity and reliability.

From the 240-series and throughout the 700/900 models safety and comfort were added to the list of values. Mainly passive safety though. The construction of the cars were still vary basic, actually very close to the standard American standard set-up with a front mounted engine and rear wheel drive, with non-individual rear wheel suspension. The design would with kind words be labelled as functional. Handling were never a part of the safety aspect.

Nevertheless on the American market the agency used the dull design as a part  of the profile of the band. The brand became a choice for the thinking person. It was a rather successful strategy with good product placement in many Hollywood productions.

With the introduction of the 800-serie (picture on the left) something starts to happen. It was a front wheel drive car, it had individual rear wheel suspension and it had some driving capabilities. It is actually the first Volvo that could be slightly entertaining for the driver. But the shape of the bodywork is still very much Volvo. It is when Ford takes over the ownership the strategy of the brand changes. Volvo is set to become a premium brand and compete with BMW, Mercedes and Audi.

As the Chinese Geely took over the ownership, new models with more and more curves in the design has been introduced. The CEO Sefan Jacoby is actually the first Volvo chief with a passion for cars. Now, the question is – was that really good for their brand?

The design of the new models has become less functional, chrome stripes has been added here and there. The decreased space inside the cars has been a target for discussions.  The commercials communicates the joy of driving more than the point of arriving safely, et cetera. You get the point. The Volvo brand started a journey Рbut it seems that they left their customers standing.

Bayrische Motoren Werken

The history of the BMW brand starts off completely different. They actually started with airplane ¬†engines (the blue and white in center of their logo is a propeller rotating with Bavarian colors). They also built cars, but under license from the English brand Austin. As that agreement expired they introduces their first model (called 320)¬†1932. And already ¬†then they had individual ¬†suspension on all wheels (introduced in the 90′s on Volvo) and and a over-head valve engine. This might sound like technicalities to you, but these are the parameters that actually create the pleasure of driving. A brand is not only a promise – the product also has to deliver in every aspect in order to get the reputation needed.

By 1938 the beautiful 328 (above) came and became rather successful on tracks and in rally. An then it continued with different models. Some of them rather heavy, aimed to be a competitor to Mercedes and other quite light and beautiful. By the 60′s BMW was no longer in good financial condition and were forced to try something new. And they did as they introduce several modern designed car models, among them the ¬†02-series.

The 02′s where small, light and with a rather competitive engine. It became a success and all of a sudden BMW was an alternative to Porsche. Not only was it a commercial success – it also brought BMW out from the shadow behind Mercedes and created a segment by and for themselves – the fun family car. 1973 ¬†the 2002 Turbo (the picture) was introduced, with its 170 php it was a rocket! Volvo were still producing the¬†Amazon (and the¬†¬†SAAB Turbo came five years ¬†later).

BMW had found a golden path and has sticked to it ever since. With the monstrous M-series as the crown of their strategy.

This profile wears off to all their cars, no matter engine size and of course that does wonders with the brand. They created the payoff “Freude am Fahren” in Germany which translates rather poorly ¬†to the American version “The Ultimate Driving Machine” ¬†- if you think about it BMW is marketed as the complete opposite ¬†to Volvo.

The point I am trying to make here is that values as performance, prestige and personal success has been associated with the BMW brand for a long time now. You don’t step in on that turf without getting hurt.

Sales vs brand

It’s so easy to want what the neighbor has, without seeing what you already got. But – ¬†no one is better of being you than you are, right? To become someone else is just vanity and that is for sure of the deadly sins of brand strategy. Ever since the mid sixties BMW has said more or less the same thing. So did Volvo, until recently when all of a sudden Volvo was supposed to become sexy. But the Volvo buyers just wanted a smart, safe and functional car. A car that takes them from A to B as safe and comfortable as possible. That’s it.

The decease spreads

Unfortunately the madness didn’t stop at the cars. The vanity grabbed Volvo Trucks as well. Recently they launched a viral campaign for the new FH series, with an YouTube film at the heart of it. The plot is dramatic, Faith Dickey walks the thin line between two new Volvo FH Trucks that are going rather fast towards a tunnel. She has to go from one truck to the other before the entry of the tunnel or she’ll become viande hach√© on that rock wall. It shows impressive bravery from Faith, good handling and precision from the trucks and stunning stupidity from the agency as well as the client – Volvo Trucks.

How can that be? They got so many views? Well it would have been a great film for a brand where the core values would have been prestige, individual success, risk taking and high performance. The Volvo brand (even as it comes to trucks) has nothing of that. It is the opposite. It might work a while in sales – but it deludes the brand. And by that, in the long run, it’s very dangerous.

Volvo, no matter product, is a brand that stands for reliability, cleverness and first of all safety. To transfer it to performance, individual success and prestige will cost a fortune and, because of the competition, not necessarily bring return on the investment. In short; don’t do it.

And now what?

All of this is nothing more than speculation from my side. But it’s built upon official sales numbers and my own experience. Sadly Stefan Jacoby suffers from a stroke he got while I was putting this blog post together (yes it took me a while). A new CEO is in place and in Sweden we can already see a change of direction. In the news the new CEO H√•kan Samuelsson talks about the efforts being put down in the new plant in Sweden. And in the commercial breaks there is a TVC running that shows the daily life of ordinary people ¬†- and of course they all drive Volvo.

It’s quite sympathetic. It’s a step in the right direction. And above all it’s desperately necessary. VW is taking customers from the Volvo dealers by the hour. But it will also force Volvo to change the design on many of their new models – because they look quite lost in this regular life. All dressed up and no one to…

Well you know.

Keep it up H√•kan. I hope you’ll do great. But I can’t stop worry tough.


Made by Sweden

What to do when you have a seven year old car and a new one is nowhere in sight? Well you take Zlatan, bring him to the mysterious Norrbotten (far up north in Sweden where no one actually goes and create som porn. You might disapprove, but it is actually what it is. A non-story “epic” commercial with a soundtrack from the master producer Max Martin. What can go wrong. Well, what about everything. Going from safety to porn is probably the only step you can take to squeeze out some sales to the hard core fans of Volvo, Zlatan and Sweden. But – where do you go from here?

How do you go back to the safest car on earth? You don’t. And Volvo just won’t become sexy in the long run. This commercial is a very clear analogy to what Volvo are doing to their brand. They literally leaves brings it to no man’s land. In a deep frozen, non-friendly, environment. Far from their home position (safety) and too long to go to the desired destination – sexiness.

Keep the faith Håkan. You gonna need it.

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