• Nov 29, 2010
Volvo should no longer be lumped into the premium category, according to the wishes of CEO Stefan Jacoby. It's not that the cars aren't good, but according to Autocar, Jacoby thinks it sends the wrong message. "It sounds like a pricing strategy, and it's got an expensive ring to it," he tells the UK pub. Having recently come to Volvo from a tenure as CEO of Volkswagen's American operation, Jacoby has no illusions about where his new brand sits. This latest statement dovetails with an earlier assertion of his that it's too early for Volvo to consider gunning for the BMW 7 Series or Mercedes S-Class, directly contradicting Li Shufu, chairman of new owner Geely.

Rather than put on airs, Jacoby wants Volvo to emphasize its unique Swedishness to stand apart from the herd. Going after the territory well-covered by the German juggernauts hasn't set Volvo's sales off in search of the 800,000 units per year Jacoby wants to be shifting come 2020, which lends a certain credence to the new strategy.

[Source: Autocar | Image: Damian Dovarganes/AP]


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    • 1 Second Ago
  • 51 Comments
      • 4 Years Ago
      If Volvos are priced against typically-equipped Volkswagens (which is what Volvo really competes with, in my opinion), they'll sell like wildfire. But if Volvo continues to try to take down BMW and Lexus, the company is doomed. They just don't compete in that league.
        • 4 Years Ago
        Volvo Is based in in Sweden. Not China. Just cause Geely owns them doesn't mean they moved to china.
        • 4 Years Ago
        It is too expensive to fight with BMW or Mercedes or Lexus. Even competing with VW is going to be pretty expensive for Volvo. They should aim for a lower price point and remove the 'expensive' parts from their vehicles. They can't compete with volume sellers like Ford, GM, Toyota or Honda as they don't have the manufacturing capacity to come up with the volume. They have to find a comfortable niche in price point, above the volume sellers but below the entry level luxury brands. Instead of trying to be a 'Me-too' luxury brand, they should be a uniquely safe Volvo.
        • 4 Years Ago
        Not to question your logic, but I'm going to do just that. Have you driven the new C30? How about a new GTI? The Volvo's damn near already at VW pricing (less than 1k between the models to start) and VW sells 3x more GTIs. It's not just the pricing, it's the cars, they're not competitive. When Mini is selling as many cars as the entire Volvo portfolio you know something's seriously rotten in the state off.. erm... wherever volvo is now based in china.
        • 4 Years Ago
        My thoughts exactly. Volvo vs VW makes much more sense and I bet they could really grow with that mindset more than any other.
        • 4 Years Ago
        @John H. - I'm guessing their talking USDM since no one on autoblog seems capable of global conversations these days, it's very jingoistic here, 99.99% of the focus on the US. Pity that, world wide convos are more fun, though would be even more problematic for volvo in this case.
        • 4 Years Ago
        Is Volvo competing with USDM Volkswagen, or DDM Volkwagen?

        There's a big difference in VW content and engineering for those two markets, and the price reflects that.

        With our biases toward safety at any cost, Volvo might compete as a "safe" near-Audi challenger in the US, but they'll have trouble elsewhere.
        • 4 Years Ago
        My understanding is that Volvo is losing money as it stands. If they lower prices (to be closer to VW's), doesn't that mean they will only be losing more money?
        • 4 Years Ago
        The future is Chinese production. Volvo has to get it's prices down, it seems Jacoby realizes that.
      • 4 Years Ago
      John sure the fit and finish might compare to a BMW 3 series or Audi A4 but the driving dynamics aren't even close
        • 4 Years Ago
        I agree... driving dynamics are the biggest lackluster component for Volvo... followed very close by efficiency. However, most people don't buy Volvos for performance (though true R owners might differ), it's for "consumers looking for unpretensious, understated, functional, somewhat luxurious and solid family haulers." - Alex740

        But they are nice cars to drive and ride in... And they always look sharp, IMO.
      • 4 Years Ago
      Volvo has always been in a funny zone of being just a bit higher priced than an average car but accepted into the inner circle of luxury brands by consumers looking for unpretensious, understated, functional, somewhat luxurious and solid family haulers. Volvo should get back to these roots and it seems Jacoby gets this.
      • 4 Years Ago
      New 240 anyone?
      • 4 Years Ago
      ah, yeah.

      Volvo has seemed to be pumping up it's prices for years and are now priced as premium cars. I am glad they see the foley in that, but I am afraid this is like 10 years too late. How are they going to drop the price of the new S60 down to something that seems reasonable, like around $25-28k? It starts at $38k right now! That is just crazy money for such a car.
        • 4 Years Ago
        38k for a 300 hp, AWD car with an interior the same level of quality as an A4 but for thousands less than something from the germans isn't too bad. The lower end model will be out soon too and that will be in the high 20s very low 30s
      • 4 Years Ago
      Now that they're built in china, they better move away from the premium image. People won't stand for 2" panel gaps when they're paying more than $3 for a car.
      • 4 Years Ago
      I never considered Volvo to be in a premium automotive category. I just thought they were expensive.
      • 4 Years Ago
      I think the Chinese influence is setting in. Or, they are realizing that the premium thing wasn't working for them at all.

      I think they are best off being a standard brand. FWD doesn't scream premium.
      • 4 Years Ago
      It sounds like Volvo wants to go back to what they were back in the days of the 164, 144, P1800, etc. The thing is, what set them apart back then was their commitment to safety, along with simple but reliable mechanicals.

      Nowadays, all cars have plenty of safety equipment (most of it mandated by government agencies), and cars are necessarily complex, due to safety and emissions standards. So what would set them apart now? As Thomas Wolfe said, "You can't go home again."
        • 4 Years Ago
        I'd say Volvo goes pretty far beyond just passing government crash tests.

        http://www.youtube.com/watch?v=j1Wy4tO9azo
        • 4 Years Ago
        All cars have to be safe for crash tests, but not all cars FEEL safe in everyday driving situations. You can drive any Honda at highway speed to realize that. Volvo (and Mercedes at a much higher price point) felt like tanks back in the day. The differentiator ought to focus on the feeling of the solid "thunk" of the doors closing, the secure feel of the ride, the precise handling of avoiding an accident, etc. And a return of the R model in every line and variant for some fun for enthusiasts.
      • 4 Years Ago
      wow......you people reallly don't understand whats going on......if anybody here has been following Mr Jacoby in the news as of late he wants the oppposite of downgrading for volvo. Mr Jacoby would like to drop the premium stigma off volvo because it ''cheapens' the brand and doesn't really mean anything.

      His plan is to bring volvo as a LUXURY brand, not by competing with audi, bmw or mercedes, but by being volvo. Volvo has always had something speacial about it, it may be true that in terms of driving dynamics they don't compare to the germans RIGHT NOW, but nonetheless if the CEO plays his cards right in terms of design, and swedish simplistic luxury, volvo will do very well. Where was Audi ten years ago......how you people have short memories....sales of volvos and audis were almost the same!....since then Audi has benifitted from great design, and driving dynamic which propelled it to success....and i think the same will happen to volvo with the right management...

      ps: and saying fit and finish on volvo`s are not up to snuff is shortsighted....somebody please go see the new s60.... i for one am excited to see what this company has up its sleeve ...
        • 4 Years Ago
        exactly....!
        don't blame autoblog followers...!
        i think this post is misleading and doesn't make any sense. shame on you Autoblog.
        Mr. jacoby said something different but no way than Volvo is heading the opposite than luxury....he don't believe in the "premium brand" terminology because you provide customers "luxury" or not. but not halfways.
        "We will bring new ideas to the market quicker than before. We are focusing on a driver centric approach and we will stand out from the crowd by delivering a distinct, individualist car experience. Not by copying our main competitors. Instead, we will do it by carving out our own, unique Scandinavian profile."

        "We will be working hard to please the American luxury car buyers in the coming years. This includes introducing more attractive products and improving our customer care. The new Volvo Cars will be a different kind of luxury carmaker for a changing world, "

        sorry but I don't see anywhere something different...!
        please Autoblog research before you post it....!
      • 4 Years Ago
      KGavar--

      "My understanding is that Volvo is losing money as it stands. If they lower prices (to be closer to VW's), doesn't that mean they will only be losing more money?"

      Not necessarily. If you decrease prices but increase sales volume, you can lower the R&D cost per car, and other overhead cost per car, by spreading those costs over a greater number of sales. Thus, if you are losing money on each sale because of (1) insufficient profits per sale to pay overhead costs, instead of (2) per-car manufacturing costs exceeding sales price, you can actually increase profitability by decreasing price and increasing sales volume.
        • 4 Years Ago
        @Mitlov - no worries, i concur, my point is that while the volvo models can creep up in price they still occupy a tier BELOW audi/bmw. It is pretty amusing the C30 climbs to a 10k premium over the GTI fully loaded when the golf is a comparable or better car depending on who you ask.

        Which gets back to my original point. For the most part they're not competitive with BMW/Audi at the top, and somewhat with VW at the bottom. A few models stand out (new S40, performance wise I guess even if it's slower than the 335i, XC60 because I have a soft spot for it) but really, yeah, LOTS of work to do with the brand. It'll be interesting to see if their new chinese stewards understand the need to invest massive amounts of R&D and cash to restart a brand.
        • 4 Years Ago
        zamafir--

        Volvo pricing matches VW pricing with the base price of the C30 (versus the base price of the GTI) and the Tuareg/XC90, but not anything else. A typically equipped C30 is far more expensive than a typically-equipped GTI, an S40 is faaaaaaar more expensive than a Jetta, and an S60 is faaaaaaaar more expensive than a Passat. That's what I was getting at with the price disparity.

        Also, I'm talking about the US market. Pricing is different in every market.
      • 4 Years Ago
      I've always loved Volvo's since forever. I've wanted to buy many but everytime I price one and put some options I realize, 'hey I could have a bimmah,audi, infiniti for this price' and end up getting one of those 3 fun to drive luxury sedans.

      But I am absolutely in love with Volvo's styling of exterior and interior. I always will be. Just can't pull the trigger on getting one.
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