Since Volvo Car was purchased by China’s Geely Holdings Group from Ford Motor Co. in 2010, it will soon be China-centered, right? Wrong. On the contrary, Volvo will continue operating as a strong, independent carmaker with a multibillion-dollar program ongoing in its plants in Sweden and Ghent, Belgium, to develop a new Scalable Product Architecture (SPA) and Volvo Engine Architecture (VEA) that will cover most of Volvo’s next-generation cars.
Volvo Cars Asia Pacific (VCAP) president Carl Goran Larsson, who flew in from Kuala Lumpur to visit the two new Volvo dealerships in Metro Manila last month, told Inquirer Motoring in a breakfast interview that he has had no contact whatsoever with Geely: “We are more stand-alone, more independent now than we were with Ford. Our product strategies are different. Our new engine and technology-based platform architecture projects in Europe are funded internally at $11 billion. The SPA and VEA projects are as big as building a bridge between Sweden and Denmark.”
Larsson pointed out that the VCAP region does not include China and Japan since these are big markets. The vehicles to be produced by Volvo’s soon-to-open new manufacturing plant in Chengdu, China, will be for the domestic market only and will not be exported, he made it clear. In 2012, the United States remained Volvo’s largest market.
Volvo assembles cars in Malaysia from CKD (completely knocked down) packs for the Malaysian and Thai markets, where driving on the left side of the road is the rule. The Volvos sold here by Viking Cars Inc., the marketing arm and direct retailer of Scandinavian Motors Corp., the licensed importer of Volvo cars in the Philippines, are imported CBUs (completely built units) from Europe. On the average, it takes six months for new Volvo models from Europe to arrive in the Philippines, but their launching is timed according to local marketing factors.
NEW DEALERS. Larsson revealed that Thailand and Malaysia are Volvo’s biggest markets in the Asia-Pacific region with Taiwan emerging as the best performing market. He claimed that in the Philippines, Volvo has so far gained a 10-percent market share in the premium cars segment.
That market share is expected to rise when Viking Cars opens two new dealerships this April: Volvo North Edsa and Volvo Alabang. Larsson expressed satisfaction with the facilities of the new dealerships when he inspected them after presenting the Volvo Dealer Plaque to Vincent Licup, chair and CEO of Volvo North Edsa and Doroteo R. Sornet, CEO of Volvo Alabang. With the two new additions, Volvo Philippines will have a total of six dealerships given its presence in Makati, Cebu, Iloilo and Bacolod.
This year, Volvo Cars is introducing a new global marketing strategy called “Designed Around You” that should result in more sales. Volvo claims that “Designed Around You” takes the car ownership experience and customer service to a new level. It represents a new approach based on customer needs that are already met by Volvo workshop offerings such as Volvo genuine parts, Volvo methods and internationally trained Volvo technicians.
“Designed Around You” hinges on the mantra that Volvo designs everything around people, building from the inside out and putting man first, then machine. The emotions that customers experience, the feelings of space, control, calm, comfort and security, are what true luxury is to Volvo, not wasteful extravagance and meaningless excess. In this context, Volvo claims to realize a higher holistic calling than just manufacturing cars, since the true end-benefit of everything they do is to make life less complicated.
CORE VALUES. “People buy Volvo cars based on their core values of safety, quality and environment,” Larsson said. “We build cars for a better life, cars that are premium in design, build, fit and finish, cars that are safe. Our cars are engineered in a way that considers humans and the environment around them, so we create the best solutions for traveling together.” Volvo’s environment-friendly direction is shown by the new engine range that VEA is developing: It will consist solely of 4-cylinder engines that, combined with electrification and other spearhead technology, will deliver higher performance than today’s 6-cylinder powerplants, along with lower fuel consumption than today’s 4-cylinder engines.
Meanwhile, Viking Cars marketing services assistant vice president Loi Concepcion-De Guzman says that local adaptations can be made from the global “Designed Around You” campaign. “Here in the Philippines our local adaptation is the ‘New You’ campaign to show Volvo as a unique Scandinavian luxury car brand that understands people. A new year is a chance to redefine what is important in your life. What will make you stand out and earn respect? What defines you and makes you distinctly you?”
Aside from two new dealerships and the “New You” marketing campaign, the launching of two All-New Volvo models—the V40 premium hatchback and its all-terrain sibling, the V40 Cross Country—early this year will jumpstart Volvo Philippines’ strategy for stronger performance and future growth. The V40 has sports-car performance capability, Larsson said. It will replace the V50 which, together with the S40, will be globally phased out.
In its Corporate Update, Volvo Cars reported that it sold 421,951 cars worldwide in 2012, a decline of 6.1 percent compared to 2011. Given the unstable economic situation making 2013 a challenging year in terms of margins and growth, it did not forecast sales for this year. Volvo expects 2013 “to be one of the most intense years in the company’s history” as it is renewing more or less its entire model range. On the other hand, since Volvo’s new product architecture and engine family will reach the market this year and its Chengdu plant in China will open before the year ends, there is reason to be cautiously optimistic about its global growth strategy eventually succeeding.