Volvo Is Upscale Enough

Volvo Interior

Sometimes we sit around the Cars.com office and just scratch our heads when we hear what car companies are doing. In yesterday’s Detroit News came word that Ford is looking to make Volvo — Ford owns the Swedish automaker — more of an upscale luxury brand to better compete with BMW and Mercedes-Benz. If you thought Volvo was already a luxury car company, it’s technically considered a near-premium brand. The differences are hard to explain, but recent Volvos I’ve reviewed were roughly $10,000 less than their BMW and Audi counterparts despite having similar features and engines. Other near-premium brands are Saab, Cadillac, Lexus and Infiniti.

Now, Ford has the best of intentions … for it. The company needs to make more money off Volvo, which continues to be unprofitable despite an improved lineup. However, with Audi already making inroads into BMW and Mercedes-Benz territory, is there room for another company to do the same?

Ford says the stylish Swedish rides the company is putting out is where tastes are heading. Ford doesn’t say it, but I’m guessing it means the same clean, simple design that Apple has quite successfully infused into the electronics industry.

What’s my complaint with this plan? I tested the new Volvo S80 and XC70, and both won me over largely due to the fact that they were $10,000 less than a BMW or Mercedes and delivered nearly the same product — driving attributes being the main difference. That doesn’t mean they’re cheap, residing in the upper $30,000-$40,000 range. Volvo has long been seen as sensible because of its emphasis on safety, but if I can get a turbo six-cylinder in a handsome sedan for $42,000, that also sounds really sensible.

There have been rumors that the S40 and V50 — Volvo’s entry-level sedan and wagon — will go the way of the dodo by 2010, and a four-door version of the new C30 will come into being instead. That’s not a problem as long as the new C30 is in the same price range, because Volvo really does need a car in the mid-$20,000 price range to get early adopters into its cars — you know, those hip iPhone users. 

Instead of refocusing Volvo, upgrading the interiors – already quite nice in the S80 — and beefing up the engines, perhaps the company should spend more money telling people about them. Accentuate the value, fashion and safety statements. Add an upgraded version of Ford’s Sync so everyone can put a stylish iPod in their stylish Volvo. Add more than the first service as complimentary; do what BMW has, offering service throughout the first few years of ownership. That alone would help quell concerns about quality issues. Maybe then Volvo would make more money so Ford could forget this premium luxury business.

By David Thomas | December 4, 2007 | Comments (27)
Tags: Rants, S40, S80, V70, Volvo, XC70

Comments 

Tom

This is the first time I have ever heard of Lexus referred to as a 'near-premium' brand. I think many could argue that Lexus is more of a premium brand than Audi and in some cases BMW. I don't see Lexus bringing out any A3 or 1 Series type cars which do nothing more than deminish the overall brand name. It reminds me of the hard lesson Porsche had to learn by making a entry level Porsche. If I wanted to buy a premium sedan the first two that come to mind are Lexus LS and MB E or S class.

Carson Tulmet

The problems with Volvo and Saab are that they are owned by Ford and GM. Volvo and Saab should have remained independent like BMW. Even one of our office admins knows Saab is made by GM as she mentioned it the other day when talking about car leases.

L

I'll probably get royally attacked for this but my honest opinion is that luxury brands were BMW, Mercedes, Cadillac, Volvo, and Lincoln - and then of course Porche and Ferrari, etc. To me Infiniti is just over priced Nissan, Lexus is an over priced Toyota, and Acura is an over priced Honda. I have never viewed any of those three as premium, luxury, near premium or whatever you want to call them. Basically, if I bought a Honda I'd feel like I was getting the same thing as if I bought an Acura - Kind of how Pontiac is to Chevy...

That's just how I view the world folks - nothing personal against any die hard fans of any of the brands.

Kenny Valson

I agree with the first poster Tom and a little bit with L's post. I think of Audi as nothing but overpriced VW's and Lincoln's as overpriced and of equally poor quality Fords. Acura is definitely the premium brand within the Honda company, however Pontiac is just another Chevy, ie rental car special, just with a different name.

My basic rule of thumb is to never buy the Motor Trend Car of the Year. I'll never forget the time they nominated the Renault Alliance...

Guys,
I'm not trying to be rude here (honestly) but have you really driven current Lexus, Infiniti, Audi or Saab vehicles?

I think if you get into a new Audi S8 the letters VW will not come to mind. Even an A4 to me doesn't really seem VWish. Sure, there are a lot of similar parts used in the two on certain switches etc but the feel, performance, materials are all quite different. Same can be said for the other brands.

Brian E

I also disagree about Lexus being a near-premium brand. Infiniti is fighting to escape that segment (and doing a decent job of it if you ask me). Acura really embodies the segment, and that's where I think Volvo will face their stiffest challenge in trying to move upmarket. Both are brands with FWD, value-oriented products, and Volvo's once exclusive safety reputation now no longer differentiates the brand from the other entry-premium brands. Acura on the other hand still can sell exceptional reliability and is seen as a technology leader, though at the expense of luxury to some degree.

Volkswagen I also see as a potential challenger. The C30/S40 don't really stand out from the GLI/GTI; the S60 is outdated compared to the Passat; the XC90 and Touareg are easily comparable, and the new XC60 will face a strong challenge from the Tiguan. If Volvo can't define their products as standing above Volkswagen, they don't have a chance of breaking into the true luxury market. The new S80/V70 are nice enough products, but they don't stand on their own.

I suppose this is why Ford wants to take Volvo upmarket. That's fine, but I think that killing the R sub-brand was the wrong move given this desire. People looking for a cushy luxury car without the performance already know where the Lexus dealer is. Audi broke into the top echelon through a relentless focus on performance. Volvo had the opportunity to really change perceptions with the S60 R. There's nothing fundamentally wrong with adding performance to the Volvo brand. Saab has had it for decades.

Volvo also needs to consider making AWD standard on all their cars (except perhaps the C30, where it could be optional). There's a strong possibility that Acura may be all-AWD except for the base model TSX next year. Volvo's AWD is currently a strongly front-biased system which provides a traction boost in the winter but does little to nothing for performance. This system won't sell against the far more advanced systems from Acura and Audi.

Americans generally equate price with quality and we all know how important perception is. It doesn't matter how much more they improve the already good engines and interiors- as long as they are cheaper than the competition, people are going to percieve them as being inferior. If two items have all the same stuff, but one costs more, than the more expensive one must be better- so if I can afford that one I might as well get that one. In my oppinion, if a company wants to be percieved as a true luxury brand, it takes heritage, and it can't be too cheap. Upgrade everything and price it accordingly. Lexus builds wonderful cars, but they have no soul no history, to a lot of people- they are too new. I think it will be a while before they get to the level of M-B, BMW , or even Lincoln and Caddilac. The last two may be down now, but they have a storied history.


Carson,
If Saab and Volvo were doing so well before- they wouldn't NEED to be owned by ford and gm. What good is heritage if you don't exist.

"...the feel, performance, materials are all quite different. Same can be said for the other brands."

Are you including Lincoln in those other brands?

I've never thought of Volvo as a luxury brand, but then I almost never think of Volvo at all. Their cars may be wonderful (I wouldn't know), but they're entirely ignorable, and I can't think of anything memorable from a Volvo ad. I'd say the first step for them to make more money is to find a better way to bring people onto the lots.

Al

Ford already has an "upmarket" premium brand called Jaguar and we all know how profitable Jag isn't.
Simple fact is that the public doesn't perceive Jaguar as the same quality as the others and they won't pay for them. If Jaguars were priced BELOW the competition, they would be a screaming success and that would build market share and confidence, and eventually command higher prices. This is exactly what Lexus did when they introduced the LS400 in 1989.
Ford will end up killing the Volvo brand if they try to "reposition" it. It is well perceived in it's market niche, but it will suffer the same fate as Jaguar if it is priced higher than the public's perceived value.
The more I see what Ford does, the more obvious it becomes that Ford is absolutely clueless. They may be building better cars these days, but their management team must have all had a lobotomy... they definitely are not firing on all cylinders.

Mart

The problem with Lexus being perceived as only near-luxury rather than outright luxury is not just down to perception but also to a certain extent to product.

Their core products (LS, IS and GS) are very close to the level of the established luxury marques. However, in the US at least, their image is hampered by their relentless quest for volume in the existence of the ES and horrid Land Cruiser thing. No maker who is peddling a front drive, gussied up Camry can POSSIBLY be considered a true luxury marque. In fact, i've always wondered how LExus would compete on volume if you took the ES out of the mix.

One may argue that the A-Class and 1-Series bring the competitors down, but the fact that they have been designed exclusively for the task, and with a certain purity of design means that the cachet of the brand is not truly diminished.

In terms of luxury brands, I'd definately include Jaguar in with Mercedes, BMW and Audi in the true luxury brands, but I'm British and perhaps have a slightly different view than an American would have. Lexus must be close to this echelon too, despite the existence of the ES.

Infinity make some beautiful cars, but like Acura aren't quite there. Acura TSX is just an EU Accord so like the ES for Lexus, kind of disqualifies it.

Aren't Volvo and Saab just cars for middle class families? A move for either of these to a more upmarket position would surely require a shift to RWD and ideally bespoke platforms.

Oh, i seem to have forgotten Cadillac and Lincoln in there. Funny that...

Seriously - The new Cadi's seem pretty nice, but with a FWD flagship, and a tarted up Tahoe in the range, there is no hope just yet of being a true BMW competitor.

Lincoln - hahahahhahahahahhaaaaaa!

Al,
I intentionally didn't mention Jaguar to see if anyone else would pick up on that. WHY ON EARTH would Ford want to take another stab at a true premium brand when they had to sell Jaguar? Hilarious.

LT,
No, not including Lincoln. No further comments on Lincoln from me...

Brian E.
Actually Acura is doing very poorly right now.
For November Acura sales were down nearly 25% from the same time last year. Mainly due to aging designs of the TSX, RL and TL. But even the new RDX and MDX (which are both great SUVs) are also down in double digits.

Volvo was down 11%

I do agree with you that Volvo has to do more with style and other factors now that more companies are getting top safety awards frequently. Good point.

Al,
I agree and disagree with you. The difference between jaguar and Volvo is that Jaguar relied on its name and looks and was kinda behind when it comes to technology, which volvo is not. Jaguar's reliability improved vastly under ford's leadership, but they were still cramped and old looking. They reminded me of going to my grandma's house and I couldn't touch anything because is was too ornate or antique. On top of that, they cost More than the competition in some cases. I think they sell better in europe where people are more formal.
I also agree with Lil Tom about the advertising- I can't remember the last volvo comercial. All the automakers should take a cue from lexus. Whenever they get a new feature, you see it on TV or somewhere- even if they are not the first to have it. And their comercials are done well. And they don't concentrate on one feature, like Lincoln is doing with the MKX's roof, or Infiniti with the rear active stear on the M. They are selling, but have more going for them then those two features. Volvo needs to capitalize on its safety leadership, environmental responsibility, performance, and luxury. If you are good at something, you should shout it from the roof top.

Al's right, the management team at ford have not "been firing on all cylinders" Thats why most of them have been replaced. hopefully mullaly will bring them back- ford is a great company and deserves better than to be the butt of jokes.

Joel Urbina

NOOOOOOOO, iam sorry ford but please leave volovo alone do not make volvo. thats why saab has been a bad car for the past year because GM bought it and made it inot a worst car.American companies should leave other companies alone and stick with their crapy cars.iam just hoping that lexus, toyota,honda, vw, saab and other foreign cars dont change at all it would be a great disgraced if some american company bought like toyota, that would be the end of me becasue toyota and lexus or one of my most favorite cars one because of their engines and quality and RESALE value.back off american motor companies, sorry to be so mean.

LM

I don't think the ES is Lexus' problem - Lexus has a decent range of vehicles covering most price points, and makes good vehicles.

Acura never quite managed to break through to the Luxury-car level. They have no RWD sedans and no V8. Lexus and Infiniti both are vets in this category. The TSX is just the nail in the luxury-coffin for Acura, considering the entire car is a shrunk down US-spec Accord with a higher revving 4-banger.

BMW I don't necessarily equate with luxury, but rather status. On the low end they are performance cars, on the high end they are sporty luxury cars, but not quite as luxurious as say a LS460L. In fact the lowly 3-series with pleather seats are fun to drive, but lack basic luxury features such as power seats. BMW tries very hard to cut the cost of their 3 to get close to the 30k mark. Arguably, M-B does this as well.

As far as Volvo is concerned, I am actually quite intrigued by them and don't expect to be coddled with super-luxury. I like the stylish swedish interiors as I like walking around Ikea and the Apple Store. I think this is one of the niches they should stick with, all the while keeping prices relatively low. To me, Volvo will always be a little quirky and they should remain as such. There are plenty of more expensive vehicles to buy. The new C30 is really cool to look at and I wouldn't mind owning one. I also don't think they should kill the S40/V50 because they need a small-ish car in the upper-20s/low-30s market. I think they should focus on build-quality and perhaps, as mentioned above, they should offer free maintenance for 4 years as BMW does. That would certainly have a positive appeal to the market.

I only view Cadillacs and Lincolns as overpriced Chevy's and Fords - no thanks.

Mart

I think the term "luxury" is possibly the problem and "premium" or "prestige" is probably more apt for the established makes. Basic BMWs are very basic an dyou get FAR more equipment and luxury on many other far cheaper cars. Get behind the wheel of an EU-spec 316i with wind-up windows and a CD player as a paid upgrade and you'll know what i mean.

However, people still buy them for their engineering purity. Even if they do not have the driving skill or ability to really make the most of the car's ability, knowing that it can do these things, and more importantly knowing that other people know it can do that is VERY alluring. Its what sells BMWs and Audis especially.

Lexus is arguably more luxurious than either BMW or Audi or Mercedes, but they do not have the kudos or the heritage to compete in the same way. They are still trading on value as their USP. the fact that you get more stuff for (slightly) less money in exchange for a more anodyne driving experience and a little less peer respect.

Please don't get me wrong though, Lexus is up there. The IS range is VERY close to the 3-series in the sport sedan market and is a more pure sports car than an A4 ever will be while it remains FWD.

I still think the ES is a huge problem in terms of how people perceive the marque though. Do i want to drive a car engineered by people who are prepared to accept such a compromised design? in a cheap car maybe, when it comes to spending more on an "upscale" brand, maybe not...

The others though, still have a way to go.

I think Joel- even though he clearly knows nothing about cars - brings up an interesting point. Ford has owned Volvo for years and they have done nothing but improve them. I think it is important to point out that Ford does not build Volvos. They are not assembled in dearborn. I don't know what GM does with Saab, but only the s40 is based on a ford platform and it is the coveted european focus platform.

Neal

Auto brands and their ranking:
Tier 1: MB, Lexus, BMW, Audi, Land Rover
Tier 2: Infiniti, Acura, Volvo, Cadillac, Jaguar
Tier 3: Saab, Lincoln

This is for vehicles that are under 100k. I got this ranking from my brother who is an analyst covering discrete manufacturing for G-Sachs. I think the list is perfectly accurate and I happen to drive a Saab!

Adam

I totally agree with Neal's post of auto brands and their ranking, except for one. I would switch out Jag and Land Rover.

It is good news that Ford wants to keep Volvo, because its a great brand and has done a lot to improve Ford. One thing I would also like to see them do is to replace the Lincoln Navigator with one based on the Volvo XC90 platform. They also should consider a Lincoln MKS wagon, with the higher gas prices,more people are looking alternatives to SUV's.

Ford should work on marketing Volvo to new markets. I live in New England and think the XC70 & XC90 should have a New England version Like Subaru did with the LL Bean version. Market it to skiing industry with its AWD for getting up to the slopes.

Dennis

The Volvo S40/V50 looks nice, but still has quality issues and is based off the Mazda platform, The C30 should do well if they market it well, but then thats Ford's biggest problem Marketing. One other thing people should know is that Ford got a lot of good safty features from Volvo and Volvo got cash when they needed it and quality. Check out CS Reports

Sanchez

Not sure if Audi can be considered at the same level as Mercedes and and BMW. When I lived in Europe the big complaint about Audi was that they were too expensive and they weren't as luxurious as MB or Bimmers.

Al

There have been a lot of interesting comments here but nobody has agreed that moving Volvo upmarket is a good idea.
Ford, are you listening?

Lukas

Last time I was in LA, I had a Volvo S40 as a rental car, granted that it was the base model I didn't have too high of expectations, and honestly the car didn't exceed those expectations. The plastic on the pillars reeked of cheepness, the trim around the seatbelt slot on the pillar kept falling out. The rear doors were missing trim and the driving dynamics were awful, compared to the VW Jetta 2.5 which I've driven, and no where near what it would need to take on the likes of Mercedes (I have a Viano). The steering felt very heavy for a small car and the engine sounded unrefined. Sure they have good design, but even Kia and Hyundai can do good design. What Volvo needs to do is just make itself more of a competitor in the market it is right now. I personally know people who were debating a Volvo and VW and honestly couldn't bring themselves to buying the Volvo. A 24k car shouldn't be falling apart period. If they can't compete with VW, theres no way that they should expect to compete with BMW, MB, Audi or even the Japanese brands. And keeping in mind that these C30s/S40s are in the same price range as an entry level A3, they need a wake up call. Audi already has an upscale image in Europe and if not elsewhere, in Germany VW is also viewed upon highly.

Sanchez

In Europe VW is called expensive Seat or expensive Skoda. Out of Central Europe, VW is very expensive when you can buy the same car with the SEAT or SKODA badges, same engines and same components.

In South Europe Volvo was always a brand for important professional people, but maybe now it not there anymore.

Sanchez

Sorry, "but maybe now it is not considered an important car anymore"

I have always wondered why Toyota can make cool cars like Lexus and ugly cars, like Toyota or Scion.

Motor Trend has an article about Chevrolet making a rear-drive "BMW-Fighter". I assume it will be a luxury model.

Find the link at http://www.LuxuryAutoNews.com

Post a Comment 

Please remember a few rules before posting comments:

  • If you don't want people to see your email address, simply type in the URL of your favorite website or leave the field empty.
  • Do not mention specific car dealers by name. Feel free to mention your city, state and brand.
  • Try to be civil to your fellow blog readers. This blog is not a fan or enthusiast forum, it is meant to help people during the car-buying process and during the time between purchases, so shoppers can keep a pulse on the market.
  • Stay on topic. We want to hear your opinions and thoughts, but please only comment about the specified topic in the blog post.
view posting rules

If you have a TypeKey or TypePad account, please Sign In

Search Results

KickingTires Search Results for

Search Kicking Tires

KickingTires iPhone App
Ask.cars.com