The Chinese Awakening of Volvo


In 2009, the prognosticators were predicting the Volvo franchise’s demise in the American Market. The August 3, 2000 issue of Automotive News reported:

The great industry shakeout of 2009 isn’t over. Ownership of at least two major players, Opel and Volvo, is still to be decided, and what happens to one could affect the other.

The Wall Street Journal says Ford has put the brakes on the bidding for Volvo in an attempt to get a better price. Citing a source, the Journal says Ford will wait for General Motors to conclude the sale of Opel. Ford hopes to interest the loser in the Opel sweepstakes to go after Volvo.

Prior to 1998, “In liberal communities around the country, from Cambridge, Massachusetts., to San Francisco, the typical Volvo driver was a rumpled intellectual with a family, someone who was typically an architect or college professor who appreciated the inherent anti-consumerist slant of the decidedly unsexy Volvo yet who also wanted a car that was well-made and, most important, safe.” Volvo Buyer Demographics, Forbes Magazine, Charles Dubow, May 12, 2003


Fast forward a few years and, in 2011, Motoring Magazine was reporting “The buyer demographic for Volvo is changing. The types of buyers are different to what they were 10 years ago.” says Volvo Car Australia managing director Matt Braid, New age Volvo buyers favour power over safety, Joshua Dowling, December 14, 2011

Who is the average Volvo driver today? Typically, a college educated professional between the ages of 30 and 50. Average income 80k plus. Even mix of male and female purchasers. See:

“… the average S60 buyer is 45 years old, has a household income of more than $100,000, and is slightly more likely to be a woman. Clearly, this is a smart, conservative market, one that is less prone to mid-life crises, and which can afford to buy any car it wants from the category. The more expensive BMW 3-Series, by comparison, has a younger (39), predominantly male demographic that, interestingly, has a lower household income. New age Volvo buyers favour power over safety, Joshua Dowling, December 14, 2011.

“However, the Volvo that was attracting many young adults was the S60 Polestar.” Ibid.

Today, the cash is pouring in. In 2016 Volvo’s operating profit rose 66 percent to 11 billion Swedish crowns ($1.25 billion) on revenue of $20.2 billion, giving it an operating margin of 6.1 percent. It has cash reserves of $4.3 billion, up from $2.9 million in 2015.

Volvo is growing despite its small market share. Their sales are posting as increases, not decreases. They have also invested half-a-billion dollars in a plant in South Carolina that can produce 120,000 units at max capacity. (60,000 on normal production track).

The plant is to start rolling vehicles off the assembly line in 2018 and employ up to 2,000 people over the next decade, “and up to 4,000 people over the longer term.”

It will use the company’s proprietary Scalable Product Architecture (SPA) platform, a modular approach — similar to a system Volkswagen Group has called MQB — that allows the design and production of a wide variety of vehicles on a sole mechanical platform. Clearly the plant’s proximity to the Port of Charleston — just 30 miles away — is important to making the financial proposition work. At the plant, Volvo said that it will make the “latest generation of Volvo models for sale in the United States and for export.” Source: Forbes Magazine, May 11, 2015.

Volvo is now a success by any measure. Global sales last year stood at 534,127, almost exactly 200,000 units more that it sold in 2009. The figures make Volvo’s ambitious statement made back in 2011 to grow sales to 800,000 by 2020 look modest.

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