We can take a break from sounding the death knell for Volvo. Although the Swedes have a long journey on the path to sustainability, Patrick and I talked with a few top insiders about the company's future and they have a clear vision (and a lot of Chinese cash) to get them out of the lurch they're in.
First off, I have to talk about the actual Volvo dinner. Most autojournos swarmed the Mercedes and Volkswagen parties, but Volvo's event was smaller and more intimate. The fun began when, per Swedish tradition, we sang "Helen Gar" and took shots of aquavit, which is "Swedish schmapps" according to the Swedes there — they may have started a little early.
It came in one of those tiny liquor bottles you see in mini-bars and party stores. It was mildly insane doing shots with the CEO of Volvo and singing in Swedish before eating very American burgers and fries.
Anyway, I spent most of the night chatting with Dean Shaw, vice president of corporate communications. I know, I know. The PR guy. But everyone knows that the mood is more relaxed when everyone's lubricated. And we'd already been drinking before we did shots.
Why are you looking sad, guy? Volvo has a plan.
I can't remember specifics so if I screw this up, Dean, please give me a holler. However, I'm convinced that Volvo knows what it's doing, and I didn't get the PR spin.
The biggest thing I took away is that Volvo knows its place in the industry. They know they don't have fresh product. And they know their current product is largely a result of Ford's previous ownership. They're realistic about their expectations; "We're not going to catch the Germans," Shaw says (compare that Martin Winkerhorn insisting that VW will sell 800,000 cars across town).
Volvo lost its way during Ford's reign. Because Ford tried to shoehorn Volvo products into cookie-cutter segments — and juggle them alongside Jaguar and Lincoln — the brand lost a lot of its identity. And everyone Patrick and I talked to agreed that Volvo's key selling point, safety in a box, is obsolete since every manufacturer is selling safety in a box.
I asked Shaw if Volvo can bring back the big wagons everyone knows Volvo for. The short answer: Yes, they will. We're seeing the V60 now and a V90 is on its way. (Fun fact: The V60 was launched in Australia first and Aussies have never had a Volvo wagon. Ever.) But wagons aren't the only thing Volvo wants to be known for, Shaw says.
Shaw insists Volvo is reaching back to its 1920s heritage when the company was ranked alongside Rolls-Royce in terms of manufacturing one-of-a-kind, bespoke powertrains. Today's Volvos obviously won't come at a Rolls-Royce price. But Volvo is going to work to shed Ford's influence on manufacturing and get back to doing things independently.
They're also going to take a more organic approach to growing their customer base. The XC90 is Volvo's biggest seller and most of its buyers are women, Shaw says. Most Volvo customers also are liberal, and middle- to upper-middle class. ("Like Subaru?" I asked. Kind of, but not quite, Shaw said.) Rather than chase luxury buyers or younger buyers or whatever, Volvo is going to preserve who's buying them now and focus on bringing in similar buyers.
(The weirdest thing I heard from the women-buying-Volvos part of the conversation was when Shaw mentioned that Volvo engineers would basically spy on parents dropping their kids off at school and see how kids get in and out of the car. Because of this, the XC90 is apparently easy for a five-year-old to get in and out of. But I'm not a five-year-old, so I can't say for sure.)
Patrick found out that Volvo really wants to build a small SUV, which makes sense if every segment follows the 40-60-90 classification. And remember how the C30 turned out to be a flop in the U.S.? Shaw said it's one of Volvo's biggest regrets since it's a great little car, but Volvo can only afford to import its highest-cost engine (and not the cheaper offerings), making the C30 out-of-range for many buyers.
Lastly, there's the financing issue. All dealers have the option to offer their customers leasing (and not about half as I previously thought) and Volvo is still finding its way with its new, in-house financing arm. Previous partnerships with U.S. Bank and Ford Credit before it weren't as fruitful, another reason why its customer base eroded.
So let's give Volvo a chance. They've promised to be more honest and forthcoming about their prospects, so expect to hear a lot from them over the next year. The V60 is a step in the right direction. (We sat in it, and hopefully we'll get to drive it soon.) After that, we can look forward to the V90. But it's not just about the wagons anymore.