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How Internal Strife And Lack Of Identity Is Killing Volvo

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Not Lincoln, not Mitsubishi, but Volvo just might be the world's most endangered car brand as our beloved Swede-Chinese partnership is still trying to figure out what to do with itself in this hyper-competitive buyers' market.

We know Volvo is trying. The Concept Coupe is beautiful, if that's the new direction for the brand. But is this really the direction for the brand? Photos say one thing. Execution is another.


Back in September it was reported that Volvo and its new owner, Geely, were butting heads about the brand's direction. Geely and its owner, Li Shufu, envision a Volvo that goes head-to-head with Mercedes and BMW, and not the fourth choice behind Lexus, Infiniti and Acura.


Volvo, however, wants to protect its loyal — but diminishing — customer base used to the Scandinavian reliability it has built itself on. It can't afford to do that anymore.

Volvo sold 140,000 vehicles in the U.S. in 2004. This year, Volvo will barely push 60,000, according to The Banks Report, which tracks sales of dealerships, dealer franchises and other car sales data.

Since Volvo split from Ford and has been taken over by Geely, there hasn't been any standout product from the brand that would attract a new customer. A new XC90 is on the way. But we won't have it for another two years.


What's also killing Volvo, according to TBR, is its lack of leasing options in its dealers. Currently, only 35% of Volvo dealers nationwide offer lease deals. That number will increase to — *drumroll* — 40% next year. Which means still more than half of all Volvo dealers don't have leasing programs.

Considering Geely's idea to push Volvo in the luxury market, this obviously has to change. The majority of luxury buyers lease directly from the dealer. Limited leasing options is what drove nails in the coffin for Saab, which found itself offering ridiculously high leasing terms at a minority of its dealers near the end.


For Volvo's sake, a new captive financing arm was formed last year. It's a step forward, but it's too soon to say how far that will take them.

Even then, Volvo seems to be on ice with its dealer network. Per another tidbit from The Banks Report, dealers were "underwhelmed" with a new product plan showing the company's new design direction, straying away from the boxy vehicles of the past and moving towards the rounded Concept Coupe styling. Which sounds like although the concept was sexy, the actual product isn't sticking to the script.


Volvo also has a new ad agency and a new social media approach, because social media! Tweeting people to get them in dealerships is going to work, right?

I was trying to think of Volvo's redeeming qualities, but kept coming up short. They always had a reputation of safety in a box, but now that all car companies are regulated to hell and back, every company competes with Volvo in the safety aspect.


And unlike Lincoln or Mitsubishi, Volvo doesn't have a stronger partner to fall back on. Lincoln still has the slimmest chance of being saved if Ford ever gets it together, and this Mitsubishi thing with Renault is...well, let's just say it's interesting. But if Volvo and Geely can't patch up their issues, we might be at the end of the road.