So predictable. More and more design and management will now be relocating to China in the very near future. And pretty soon, Volvo will end up just being a badge job.
Typical negative nancy specter. You can build cars for the Chinese market without screwing them up for the rest of the world. The Chinese idea of Luxury and the Swedish idea of luxury are obviously different. Just like the German and American versions of Luxury are different. Better modular manufacturing techniques will make it easier to make those kind of changes. Volvo is also going to expand production in China which will make Volvos just for China.
In fact that is pretty much what the full quote says.
Volvo has one weakness and that is the design. And the cars? interior does not feel luxurious enough. It feels too Scandinavian. They haven?t adapted to the Chinese people?s perception of luxury when it comes to the interior design of Volvo Cars and this has to be addressed,? said Li Shufu to SVT.
You can make interior changes just for the Chinese market to make them happy. You can make suspension and wheel changes to make them happy. Those are easy fixes across build lines for different markets and is something manufacturers already do to some extent.
Watch this Video.
http://www.economist.com/blogs/schumpeter/2013/04/luxury-car-industry
I can't imagine that a Black on red interior choice is terribly popular in most markets outside of China. That being said there is new Cranberry leather interior on the C70 that looks pretty good with the Ember Black exterior paint.
Volvo already makes long wheel base S80s just for the Chinese market just like Audi makes long wheel base A6s and BMW does the same with the 3 and 5 series. You have a surplus of cheap labor in China. Not as cheap as it was a few years ago but still relatively cheap. A mid-level executive can afford to pay someone to drive them around. They can't afford the traditional chauffeur driven 7-series/S-Class/A8 though. Those cars are much more expensive in China because of currency exchange and because those top end models are typically imported and not built in China. This is changing slowly as more top end vehicles are made in China and as the Renminbi has been allowed to appreciate slightly in recent years. What is mid-level Chinese executive to do? He can't be driven around in a regular 3 series not enough room back there.
Ahh but the market has an answer. Special LWB versions of those less expensive vehicles that are already being built in China. I expect Volvo to continue this trend with more LWB versions of regular vehicles. Maybe a LWB XC60 would work well?
I also fully expect Volvo to come out with a larger sedan above the S80 as frankly the S80 is a little small in its current size. A larger sedan would please the Chinese market and allow the regular S80 to grow some. I think both of those cars could work in the US and Australian markets too as they both appreciate larger vehicles.
I don't imply that this chinese dude has any clue what he's talking about, but...
Do they? And if yes, are those few people enough? Seeing that in 2012 for example Volvo sold less cars than BMW just SUVs on the global market, I am not sure those numbers justify it. If Volvo is fine with being what is effectively a nieche-brand, ok. If its profitable, even better. But if thats a no to both, they might consider actually listening to the chinese dude.
Some people coming in to buy Volvos don't even know they are a Swedish company. Some people think that Ford moved all production to America when they bought the company. Some people think they are German. In order for Volvo to sell more cars in the US they need to have more aggressive financing and lease options and in order to do that they need to leverage more volume. The higher volume will let them spread the cost of those lease incentives around.
Hmh its a circle crap.
Enter China. Huge immature market for luxury cars as long as they are targeted the right way. Much higher profit margins in China then the US or Europe too. All that volume can help drive down costs to expand sales in the US.
Well, I wouldn?t say that people actually buy them because they are Scandinavian, I don?t go to Ikea and buy their furniture because it?s scandinavian ... I buy it because it?s nice. You buy Volvos because they aren?t that mainstream, different ... or you don?t buy them because of that. It?s not the "scandinavian-ness" ...
For the owners it?s a question where they want to go with Volvo. Mainstream success or niche-appeal. If they want to turn Volvo into another Kia or Hyundai, I think the whole Car industry would be at a loss.
You have it exactly right. Sometimes people who have no idea that Volvo is Swedish come and look at them because they prefer the more simple minimalist design at least in the interiors. I have gotten generally positive feedback on the sexier bit more complex current S60 and XC60 exterior design. The thing is that simple Scandinavian design is, at least as I understand it, not necessarily the ideal luxury interior in China. You can make changes to the interior to appeal to different Chinese tastes without making those same changes to cars sold in other markets. At least to an extent.