Can Volvo Survive?

Word came today that Volvo will lay off another 3,300 employees. That brings its total layoffs this year to 4,800 — not including 1,200 consultants — or approximately one-sixth of its workforce. The layoffs are due to poor sales, which the company blames on the economic downturn. In September, sales were down a whopping 51.8%.

However, we’ve noticed a downward trend in Volvo sales that goes further back than the past month. So far in 2008, the brand’s sales are down 25.8% despite having a number of new models for sale. Not only are these models — including the S80 sedan, V70 and XC70 wagon — recently redesigned, they’re generally less expensive than their competitors, extremely safe and well-regarded by Cars.com’s staff. 

Where is Volvo missing the boat if it’s designed and introduced good new cars?

Comments

I thought the S60 has been the best selling vehicle in the lineup, even though it has aged. I personally was shocked to find that a car the size of the C30 got such bad gas mileage when I last visited the local Volvo dealer here in San Diego.

"...they’re (Volvos) generally less expensive than their competitors, extremely safe and well-regarded by Cars.com’s staff..."

Less expensive? Apple to apple - more expensive. They sell 5 cyl for price of 6 and still can't make it efficient as 6 cyl.

Volvos are bad in fuel efficiency and not reliable.
Why would I buy XC70 if for less money I can get AWD HUGE Sienna and do better on fuel as well?

Volvo used to have best returning customer base. If you got Volvo in 1975 you would come back for more in 1985 and then in 1995. But you wouldn't in 2005. People wouldn't pay big $$$ for unreliable junk. Who needs a safe box sitting on the side of the road?

Tony,
For the money the S80-V70-XC70 are about $10,000 less than similarly equipped German brands.They have 6s and turbo 6s and a v8 for the s80. Compared to the BMW Audi and MBs they are about as fuel efficient. Not really cross shopping sienna and volvo are we?

i have no personal experience with Volvo's; however, reading expert reviews, I get the sense that they are generally boring, relatively unrefined compared to German brands, and lack any character.

Volvo's used to be considered "safe" cars. Nowadays consumers are more savvy and realize that there are plenty of other brands that have excellent safety records and many offer plenty of safety features for less money.

i think the quiet/bland styling is a big problem (among others) -- those who don't care for styling as much are probably turning to Toyota and Honda for their daily commuter/ appliance-on-wheels sets, brands that are perceived as less expensive, very reliable, and quite "safe." Volvo's appeal seems ... to have dissipated

Volvo had the "safety" label to thank for a big chunk of its sales in previous years/decades. Nowadays, when most new cars get 5 star safety ratings, they've lost that edge. Getting it back or trying to re-invent themselves is not going to be an easy process. In the end, it's all about branding.

I love Volvos - always have. Volvo's problem is that it's in an uncomfortably "middle" position. If I can afford Volvo I'll spend a couple of thousand $$$ more and get "real" luxury OR I aspire to the Volvo but don't have the couple of thousand $$$ more to get it. Add to that the gas mileage and the "love it or hate it" styling (that I personally really love) and the only people buying Volvos are the people that already love 'em.

Oh and ditto to what Adam said. The gas mileage of the C30 was almost disgraceful (shocking as he said) for a car that small - even before the gas prices REALLY spiked. I mean . . . dude.

I think a lot of you guys bring up good points. While volvo has a reliability issue it's no more than let's say an Audi or VW. Audi is having record sales except for very recently because of the economy.

I think a lot has to be said for styling and appearance that Volvo is missing out on. That's probably why the XC90 (which is their most problematic vehicle) is the best selling. it's a good looking SUV.

It's interesting that Sweden is so well known for its design prowess in every other area besides cars. you'd think it would be a national pride thing.

Safety: Very true there are more IIHS top safety picks than ever before, but Volvo still makes it for almost every vehicles and does bring new safety tech like blindspot monitoring before most others.

As for performance I think the cars are comfortable and perform well enough. The S80 is certainly more fun to drive (especially the turbo) than an MKS and they're not much different on price.
I've said before some people don't want to drive a BMW with the heavy steering and sport nature. Some folks just want a comfortable car to commute in or take the kids to school in like the XC70. This middle ground could be lucrative for Volvo but it seems to be hurting them instead.

I would like to chime in as well. Now now, don't think of this as brand/domestics bashing, but aren't we forgetting something - that Volvo is owned by Ford?

The assoication of Volvo to Sweden is not as apparent nowadays then to Ford itself. This is very similar to Saab/GM! When previous owners back in the 80's and early 90's realize that it's no longer a Swedish car (i.e not really "European"), the attraction there has decreased dramatically. Consumers today (not previous Volvo owner) can find out much info on Volvo with the click of a mouse easily.

Thus - paying the higher price than either the domestics or to some extent the Japanese, and getting an essentially domestics vehicle, doesn't sound good to anyone's wallet, does it?

When you go for Bimmer or MB, though many of their models are already Made In USA, you still know that the brand is European, so still you can hang on to that European brand notion...hence willing to shelve out the extra $10K (compare to similar equipped Volvo). Can the same be said on the Volvo?

I disagree with the "European-ness" as the vast majority of car buyers have no earthly idea that Volvo's parent company is Ford. And besides, Volvo trickles design to Ford more than Ford trickles design to Volvo. One other person hit on it best: People don't perceive Volvo's as prestigious enough to be considered a luxury car and therefore they end up being compared to mainstream cars and SUV's where their higher price really deters buyers.

Watchdog is correct. Ford uses Volvo's platforms, not the other way around. They have their own engines etc. The interiors are completely different as well. No shared switchgear etc.

There is something the main stream media will not note: Ford Motor Company and its relations (e.g. Volvo) have been involved in a nationwide boycott that has been successful. The organization that issued the boycott has simply requested that Ford remain neutral in the homosxual agenda and same-sx marriage agenda. Ford has continually refused to remain neutral and has, in fact, gone full steam ahead in promoting this lifestyle.

I love Volvos. They have improved a lot over the years, but one problem I see is that they don't offer a lot of the technological goodies you can get with Acura, Infiniti, Lexus, or the Germans. They just recently added built in nav as an option (and it's not really all that integrated). Their vehicles are also underpowered compared to the Japanese and German vehicles. I don't think that the fact that they are owned by Ford is a factor, nor do I think styling is (they look very European and gorgeous IMO). I think the competition is just much stiffer than it was before.

If we look at the S40, we see that it has 168 hp FWD for $28,XXX. For the same price I can get an Acura TSX with 201 hp FWD and leather, heated seats, moonroof, and a few other nice features standard. To get the same features in a S40 (with 168 hp) would cost nearly $32,XXX.

The XC90 is Volvo's top selling vehicle and it's also costly compared to it's competition. The V6 2WD XC90 (235 hp) cost $37,XXX. The Acura MDX with SH-AWD and V6 (300 hp) cost $40,XXX and comes with more standard features than the XC90. To equip the XC90 with the same features would cost $44,XXX.

So to some up my whole argument, I think the reason Volvo is declining is the fact that they are no longer competitive.

Also for those complaining about the C30's gas mileage, the C30 nearly matches the gas mileage of the less powerful VW GTI and it well exceeds the gas mileage of the VW R32. Not bad ;^).

Dave, may be I was too fast to say that Volvos aren't less expensive then BMW, MB and OOOO, but they also not as advanced as those.
For example, until recently, the V70 and S60 dash looked like one of Yugo and you can't even compare to general interior aestetics of German makes.
Yes, why compare XC70 and Sienna? Ok. One day I thought, I don't need a big minivan but like a wagon car, which will be smaller, more fuel efficient and so on. XC70 is very appealing wagon. Once research was done - getting a fully blown Sienna was a better deal: more reliable, more comfortable, more fuel efficient and less expensive. Yes, this is how I came to compare these two cars.

Personally, I like very much the way Volvos look. But I know that money can be spent better then that.

I agree with all of you, who said that problem is Ford association and bad positioning on the market and quality issues and fuel economy.
Another thing. In the last 5 years Volvos didn't advance in any of technology (besides safety area). They still run on old tech engines while others constantly improving. Their engines are not as refined as many competitors, above and below.
But I would suggest that quality is the biggest problem. And people do not return, while Honda, Toyota have customer base. Yesterday I talked to one woman. She asked me "what whould I buy, Civic or Corolla?" And this is it. She didn't even think, Mazda3, S40 or Elantra. In her head it is a "H" or a "T" .

CJ,
I think the problem is Volvo positioned the C30 as a Mini Cooper competitor not GTi. It doesn't perform as well as the GTI even with a few more horses. They need to win over stylish urban people, not performance afficianados. That's why the mileage is a killer IMHO and starting price.

Tony,
Check out these newest S80/XC70 interiors. They're very nice. The new XC60 is another step up too. I definitely would rate it ahead of a Saab or Cadillac if still a step below the Germans.

Also the Sienna is one of the more problematic Toyota models out there surprisingly enough. But your point of the Volvo wagon vs a fully loaded Odyssey or Ford Flex still holds.

Tony, a better comparison would be the VW Passat wagon. VWs, like Volvos, are a little nicer than you're standard Toyota or Honda, but not quite as nice as the "Big 6" luxury brands. IMO I think the Passat looks better than the V70, and it gets better mileage. 32 mpg hwy is much better than the V70 (26 mpg hwy) or even the Sienna.

Interesting how DaveT compares Volvo lacklustre design to trend setting Swedish design in other areas. I actually think Volvo aesthetics, especially with interiors compare VERY well to other famed Swedish design, such as Ikea (to state an obvious example).

In a similar way to Ikea furniture, Volvo interiors are impecably designed to be as easy to use as possible. In europe, Volvo is well known for making the most ergonomic interiors in the industry.

Their interiors also echo Swedish design in that it is not flashy but neutral and rather plain. It's the thing that people love about Swedish design in other areas and, I think, makes Volvo interiors one of the nicest places to spend time.

The problem Volvo has is that Dynamically they do not compete with the premium RWD opposition, but are just TOO expensive to compete in the mainstream. I personally think a RWD Volvo, even without a massive styling change could compete with the premium makes out there. They could use the extra revenue from selling at a higher price to gloss up their offerings a little but the basics are there. The problem is their cars, despite being good, are seen as not being on the same level as their German opposition.

With the rapid improvement of mainstream cars, there is very little room for a maker that resides in that no mans land between mainstream and premium.

Mart, neither Audi nor Acura have RWD, and they're doing much better in the luxury segment than Volvo. RWD isn't going to save Volvo. Volvo needs more powerful engines to compete with the other luxury makers. 168 hp isn't going to cut it in a $28K sedan. I can get more HP in a base Accord. Volvo just needs to update their entire lineup's engines. None of their vehicles (except the C30) have enough power to compete.

Volvo has some interesting and unique designs, but I get disinterested fairly quickly with Volvos. The outside is boring, but the inside is great. Well actually the XC60 seems to be the most balanced car (in terms of having a good interior and exterior designe)compared to the rest of the line up. So that's just about the only Volvo I would consider. On the other hand, I would rather go with an Infiniti anyday.

Besides all other reader comments . personally i feel falling sales of volvo popular sedan like s40 and s60 is mainly due lacking of rear headroom and rear legroom respectively to be consider a roomy family sedan . i just hate the rakish 'C" pillar design function without achieving an roominess !!! Please don't blame totally on poor state of economy health !!

If it cannot sell well it is obviously not accepted well by the comsumers for these part reasons too.

The C pillar rakish design looks stylish but the point it is actually killing the sales of these unroominess sedan for the asking price with the competitors like camry and accord.

Perhaps Volvo designers should consider designing less rakish c pillar sedans to enhance better rear room and in return be rewarded with better sales . Look at yesterday 240 for clues for every 240s being produced . Demand sometimes exceed supply eventhough boxy(need not be boxy nowdays)with appropriate designed inclined "C' Pillar without being too Rakish !!. 240s had been volume seller for almost 2 decades

If volvo is thinking to design another rakish "C" pillar on the new s60 or s40 replacement or whatever without any outstanding achievement of rear roominess , My suggestion now is that better for volvo to close shop rather than spending much needed funds for the development of these models as the majority buyers will opt for much roominess safe family sedans like camry , accord ,passat , and so on as more acceptable. Volvo will simply not sell well !!

There is nothing outstanding achieve on Rakish "C" pilar design in fact we lost much needed rear headroom and rear legroom .

Volvo Management stupidity in the making and should rethink C pillar concept in order to survive. Please consider building a more roomy family sedan besides providing the much safety and new engines needed.

Having worked sales in a Volvo showroom in NYC for the last three plus years, it's been tough to see such a fine lineup fail to compete. The US Dollar/Euro disparity is partly to blame. The company ends up being lost between Euro Luxury brands and less expensive upscale Japanese vehicles. I can understand Ford's logic in taking away Swedish Management and having a Ford exec, Steve Odell take the helm. Obviously brought in to further trim costs, it will effectively hurt Volvo sales even further, unles he can do what Mark Field did for Mazda 10 years ago. Mazda's 'Japaneseness' stayed intact. They must keep the 'Europeaness' in the forefront of their marketing or they could end up a puppet company like Saab/GM. Even though Ford get's better vehicles and saves millions of $$ in R&D because of their collaboration with Volvo & Mazda (the Ford Taurus, new Lincoln MKS, are among the finest cars Ford has put out in years...from Volvo's roots), Volvo just doesn't reap any benefits. Maybe a new agressive ad agency campaign can help, but if Ford doesn't have enough money to even market their own cars, Volvo will have a steep uphill battle.

Hopefully the new 2010 S60 could fix up a few of the problems in the lineup. The thing is the C30 wasn't intended to be a high volume seller in this market. It compares well with the Mini Cooper, but you must compare it with the Mini Cooper S JCW because they have similar performance. And the JCW starts at about $30,000 and the C30 at around $23,000. And even though Volvo is losing market share here, it is gaining sales in the UK, Russia and around the Middle East.

The RWD Volvos of the 70's, 80's, and early 90's were "bricks" and were mechanically simple, built like tanks, and groundbreaking safe in their day. Not to mention decent mileage and Euro handling (although often lacking in the acceleration department.) Once they went FWD and then added the "drive by wire" (should be called "NOT drive by wire") their quality went into the toilet. Would I buy another Volvo? Sure - but only if it said something like 240, 740, or 960 on the tailgate.

Volvo's are just like Saab's - has beens. Just because you price something in the same category as Japanese or German luxury does not mean it belongs there. Years ago the likes of Acura surpassed Volvo in value and now today Honda and Toyota easily do it with their (loaded) mainstream cars. I would take a 270hp Accord over any Volvo any day as it would runs circles around it. Secretaries still buy...err I mean lease Volvo's and Saab's but that's about it.

Last year I went to a Volvo dealership for the first time to test drive a few models. When I went in, I knew Volvo was owned by Ford, and I had the impression of the brand as being somewhere in between Ford-Toyota-Honda and Audi-Acura-Lexus, but closer to the latter.

After test-driving the S60 and V70 (2007 models, I think), I was thoroughly unimpressed. I decided that their legacy must be based purely on the harder-to-see aspects like safety and reliability, because it wasn't doing it with fit and finish or driveability. It really made me question the fit with Ford, because they seem to overlap more than I previously thought. Yes all the safety trimmings are nice, but that's what lifts the price tag from it's apparent family-sedan level to a in-between-family-and-luxury level.

Also, minor point, but the salesman told me there was no audio aux input jack, and Volvo didn't have it on any models, and he didn't know of any plans to have them on even 2008 models. Maybe he was clueless and BS'ing, but if he's right, then ... what the heck??

Again, just my impressions. Disclaimer: I've never owned one (I've owned a Subaru, Civic, Accord, Camry, Sable, Tempo, and Suburban). But maybe it's those same impressions that are chasing buyers away...

Last year I went to a Volvo dealership for the first time to test drive a few models. When I went in, I knew Volvo was owned by Ford, and I had the impression of the brand as being somewhere in between Ford-Toyota-Honda and Audi-Acura-Lexus, but closer to the latter.

After test-driving the S60 and V70 (2007 models, I think), I was thoroughly unimpressed. I decided that their legacy must be based purely on the harder-to-see aspects like safety and reliability, because it wasn't doing it with fit and finish or driveability. It really made me question the fit with Ford, because they seem to overlap more than I previously thought. Yes all the safety trimmings are nice, but that's what lifts the price tag from it's apparent family-sedan level to a in-between-family-and-luxury level.

Also, minor point, but the salesman told me there was no audio aux input jack, and Volvo didn't have it on any models, and he didn't know of any plans to have them on even 2008 models. Maybe he was clueless and BS'ing, but if he's right, then ... what the heck??

Again, just my impressions. Disclaimer: I've never owned one (I've owned a Subaru, Civic, Accord, Camry, Sable, Tempo, and Suburban). But maybe it's those same impressions that are chasing buyers away...

Volvo uses a Ford platform for C30/S40/V50, not the other way round. They use the Euro Focus platform that also gets used for the Mazda3. Most engines are EU Ford as well.

Shame you guys cannot get the EU Ford 1.6 diesel that Peugeot developed with Ford. That has got MPG that will put a Prius to shame on the highways!!!

The topmodel Ford Focus in the EU does actually use the Volvo 5-cylinder turbo engine... (think the Ford Kuga and Volvo XC60 might use this platform as well but not sure)

The new Mondeo, I think, uses the V70/S80 platform as Ford did not have that much money available when they tried to develop it and had to rely on Volvo to provide them with the basic platform.

The S60 is just old and does not use Ford hardware...

yeah
they will cause i know with the new s60 concept they will reel in the costumers!!!!