Commentary
Volvo Is Global, But How Swedish Is It?
- by Karl Greenberg , Staff Writer, May 12, 2015
But the company is also going to be selling a car in the U.S. that is made in China, which puts a spotlight, an unwanted one, on Volvo's owner, the Hangzhou-based Geely, which acquired the company from Ford five years ago. The car, a stretch version of the Volvo S60, is the first from China hitting U.S. soil wearing Volvo livery, but there will certainly be more. What does it mean? Will anyone care?
My iPhone, my shoes, my clothes, pretty much everything else mass produced I own is made there, why not my car? What’s in a name, anyway. Does it matter if the Swedish car you are driving is a Chinese-built car made by a Chinese company? Is there, in the consumer's mind, a difference between “Volvo, designed, engineered and built in Sweden (and owned by Geely)”; and “Volvo, made in China, by a company called Geely, which owns Volvo”?
Yeah, there could be a problem. Volvo is a beloved name, a beloved brand. But could it be drifting toward intellectual-property purgatory: a brand that exists solely as a name, and everything that name represents? An idea acquired by Geely? Volvo is an aspirational brand and a big part of that equity in the U.S. is surely its Swedish provenance. Consumer Reports’ 2014 Car-Brand Perception Survey conducted by the Consumer Reports National Research Center last year ranked Volvo in the top 10. It has pitched itself against Mercedes-Benz in fairly recent advertisements for its crossovers. It wants to be taken seriously as a luxury brand.
By contrast, Chinese-made still means “gimcrack” and “knock-off” for a lot of Americans. One can assume that Geely will start making its own Geely-nameplate cars in Volvo's new plant near Charleston, S.C., which has a capacity for 100,000, way more than Volvo needs in the U.S. And, if Geely elbows its way onto the assembly line, will Geely cars find their way onto showroom floors with Volvo? God, I hope not.
Volvo marketers, meanwhile, are imbuing marketing with Swedish-ness. The company just launched a new campaign that features Swedish electronica artist Avicii as something of a brand spokesperson. The video for the campaign for the XC90 SUV is something like a travelogue of Stockholm and Osterlen, as we see Avicii's stomping grounds, and his family and friends. Doth she protest too much? Is this a “We are Swedish, seriously” moment?
In a statement about the campaign, Alain Visser, SVP of marketing, says it celebrates Volvo's evolution to “new, more nimble and customer-responsive Volvo cars.” It's also a truly global Volvo now, since it has manufacturing plants on three contents, or will once it gets the $500 million U.S. factory up to speed in 2018. By the way, and off-topic, here’s a good article on the money trail for foreign automakers assembling vehicles in the U.S. It’s worth paying attention to because “Made in America” is a key talking and marketing point for these companies.
And how about Geely’s ambitions in the U.S., assuming it will share some of Volvo’s assembly line down in Charleston? A Chinese car made in America? Well, good luck. It only took Kia and Hyundai 20 years to convince Americans to consider their cars that didn’t involve Filene's Basement pricing. Geely will have some fun trying to find some actual reason to be in the U.S. beyond selling the cheapest possible car.
Karl Greenberg writes about automotive, consumer-packaged-goods, sports, and travel for “Marketing Daily.” Prior to this, he was the automotive editor at "Brandweek" magazine. He was also the Internet advertising technology writer for "Adweek," and petrochemical editor at "Chemical Market Reporter". You can reach Karl at karl@mediapost.com.
I've owned two Volvos over 25 years.
Recent loaners have indicated that those days are over.
Now Volvos look and feel like every other car whether it be Ford, Hyundai or Toyota.
Originally bought as a "baby crate", we came to like its sturdy, roomy stiff and odd looking comfort.
Kids drove it without parents worrying if it would be used for street racing.
The blower motor just went and now I'm thinking Subaru.
Pity
Is China going to send their own people here at substandard wages and have them live isolated from the general population making sure they don't have enough money to leave or threatened to send them to live in the country in China if they don't do as required like they do in other countries ? It's not just about a car business. Some of the people who speak a bit of English who they put in their stores will tell you when you ask. Some won't.
Hah. if that were discovered to be the case...I shouldn't be too surprise.
Brands are more global, and about the image, than the specific country of origin. At least that's how Americans think. Their brand reputation is built on sturdy, reliable, safe, and odd-looking (boxes), supported by the Sweden pedigree. Sweden alone doesn't sell it. It would be an interesting bet to see how many people can place the Volvo brand with Sweden.
If Volvo exists as a name, it still has tremendous value, even if the provenance starts to erode. If CR still ranks it highly, and their marketing positions it as a top tier brand, few people among the masses will do the homework required to refute that, or refute it solely because some of the cars come from Chinese factories.
The Volvo brand let itself be tarnished long before Geely purchased it. However, let's put the automobile aside first, and get an understanding as to whether we understand your real concern, Karl. Are you actually building a case pertaining to Global trade? Or, is your case against doing business with China?
Do you want to push Samsung back to South Korea? Are your plans to cease bringing Nestle products into the U.S. because it is a Swiss based company? Perhaps you don't want to bring in diamonds from Russia or South Africa for industrial or fashionable jewelry use? Are you advocating driving an isolationist practice, al la of the second decade of the 20th Century?
No need to protect the American consumer from having a choice of buying a Geely car of today's standards in the PRC. Spending time in Mainland China, and having ridden in Geely cars, I'll stake a strong guess that Geely would have a difficult time moving that car out of showrooms in any appreciable manner. However, as Geely proves itself as a solid learning of building quality into the automobile over a period of time, you may see the vehicle built here in South Carolina.
In your mind, it took a good deal of time (20 years) for Hyundai and Kia to build their brands. As of this writing, their quality, value, service, and warranty place them ahead of many of their American brethern. Toyota did not become a sensation in the U.S. overnight. Today, it's the largest automotive company in the world.
We can't build a wall against new products or ideas in this country. I'm afraid I cannot agree with you views.