Geely’s chairman, Li Shufu’s restraint in allowing Volvo to challenge the German luxury brands is starting to see profits.
Once considered a “near-luxury” brand, Volvo is now being cross-shopped with BMW, Audi and Mercedes and is achieving similar transaction prices. Volvo has lured over luxury customers by focusing on quality. Under the umbrella of Ford, they lost their image of quality a little. Now they are rebuilding that with very good designs but keeping their DNA of safety.
The same can happen for Lotus. Lotus could lure supercar buyers very soon. Imagine Volvo crafted interiors and turbocharged engines with Lotus design and handling. You could have a challenger to McLaren, Ferrari, Lamborghini and even Porsche.
Volvo has worked hard on its interiors. In 2013, Volvo’s Samuelsson described how he took back the initiative from the Germany luxury makers: “BMW is doing their best to design their vehicles to look like Scandinavian furniture inside. “Why do we let them do that? That’s our territory. They could design their vehicles like a Bavarian beer hall.”
The company posted a pretax loss of USD653 million in 2009. But Geely wasn’t buying a wreck the next year when it paid Ford USD1.5 billion.
Volvo has taken pains to improve the design of its interiors, which has helped it compete in the luxury space. Its new design philosophy can be seen in the XC60. Steve Armstrong, the former COO of Volvo under Ford and the man responsible for handing over the company to Geely in 2010, said Ford wanted to leave Volvo in condition to survive. “The instruction from headquarters was to be a responsible seller and not to just abandon it,” Armstrong said.
Most importantly, Ford had helped develop what would become Volvo’s best seller: the XC60 midsize crossover, a vehicle whose final sales year last year was also its biggest, with 161,092 sold globally. (The XC90 is its biggest seller in the U.S.)
“The XC60 has been key to Volvo’s success,” and an all-new XC60 has been launched globally and will arrive in Malaysia this 2017 Christmas or sooner.
