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Volvo To Compete With Luxe Brands

After failing to sell Volvo, Ford has decided to move the brand more upmarket in a bid to boost sales and profits -- a risky strategy that is making Volvo executives in Sweden jittery because it could alienate traditional buyers.

Lewis Booth, the chief of Ford's European operations, last month told Volvo executives that he wants Volvo to become a legitimate premium alternative to rivals like Lexus, BMW and Mercedes-Benz -- not by reinventing Volvo, but by intensifying its focus on safety, simplicity and Scandinavian design. "It's not a change of direction, it's just building on what they've got," Booth says.

But some executives in Sweden worry that by trying to transform Volvo from a near-premium brand into a full-fledged luxury marque, Ford will damage Volvo's pristine image. They also know that Volvo could only survive as part of a larger, global car company like Ford.

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