[Cartoday]
Volvo does not need to be sold, but the brand’s future success will pivot on a re-think of its current approach to the market.
In a recent report in UK’s Autocar, a senior executive within Ford has dispelled rumours that the company is looking to offload its loss-making Swedish subsidiary.It has been suggested that a fundamentally-flawed product strategy is to blame for a sharp decline in sales of the company’s products over the last couple of months. For some time now, Volvo has attempted to take on the likes of Audi, BMW and Mercedes in the hotly-contested premium segment, without a great deal of success.
Rather than concede ownership of the company to bidders from Russia or China, Ford will try to realign Volvos products to compete in the ‘premium mainstream’ segment occupied by the likes of Volkswagen and Honda. The company has traditionally done quite well in this section of the market, where badge-consciousness is not as much of a factor.
Ford will reportedly shift Volvo’s product strategy from expensive, lower-volume models to high-volume products with a lower sticker price to entice buyers in this more price-sensitive market. This plan, which could be approved as early as next year, aims to boos the company’s annual sales from 420 000 to well over 600 000 units.
Given its own ailing sales and the move away from large SUVs, Ford will probably achieve the aforementioned transformation by developing Volvo’s future models more closely with its own products. A good example of where this approach could have paid dividends was Volvo’s decision to develop its XC60 SUV solo independently of Land Rover or Ford, which resulted in a project that cost the company a great deal of money and was late to arrive on the scene.
Considering the success that Tata has seen with its acquisition of Ford’s Jaguar and Land Rover brands, its understandable that the company will want to hang on to one of its well-known subsidiaries rather than auction it off competitors in emerging markets.