Wednesday, February 24, 2016
Volvo is Going Beyond the Numbers
In terms of pure numbers, 2015 wasn’t such a rosy year for Scandinavian Motors Corporation (Volvo Philippines). Though the Philippine automotive market grew substantially last year, the premium car brand saw a single-digit percentage drop in sales attributed to the company’s non-participation in sales discount bonanzas known as “APEC”. And yet, there’s no pressure from the regional office to deliver four-digit unit sales annually. Instead, it’s all about delivering an immeasurable customer experience that cannot be matched by the competition.
This fact is reiterated once more with the visit of Volvo Cars Corporation Vice President for the Asia and Pacific Mr. Jari Kohonen and Market Area Director for Asia Pacific Region, Mr. Chris Wailes last week. Even with Shanghai, like the rest of China in a virtual shutdown for the Lunar New Year, Mr. Kohonen and Mr. Wailes weren’t here for the beautiful beaches and cheap beer. Instead, they’re in the country to throw their support to Volvo Philippines and helped lay down the foundations for a robust and aggressive plan in 2016.
And surprisingly, that plan has little to do with sheer volume.
Instead, it’s all about focusing on what’s important for Volvo: the people. It goes back to Volvo’s founders Gustaf Larson and Assar Gabrielsson who said: “Cars are driven by people. The guiding principle behind everything we make at Volvo, therefore, is—and must remain—safety.”
After a rough half-decade including a sale from Ford to Geely, Volvo has learned to make some tough choices. At the same time, it’s managed to look at itself to make smart ones. At the foundation is the new Scalable Product Architecture or SPA and Drive-E.
Underpinning the new-generation Volvos starting with the all-new XC90, SPA allows the company to realize its vision that no one will be seriously injured or killed in a new Volvo vehicle by 2020. If that sounds too farfetched, it’s not. The current models already have a 60 percent lower injury rate compared to the average modern automobile. SPA incorporates a new, patented safety cage made of different steel grades as well as safety technologies that envelop the occupants be it active, passive, or avoidance.
Apart from being designed for safety, SPA allows for future adaptability including an electrical structure that helps Volvo easily adopt sophisticated functions especially in fast moving areas like microprocessor, sensor, and camera technology. This means Volvo can easily adopt their cars for car-to-infrastructure and even car-to-car quicker than other brands. Self-driving cars can therefore be developed with little modification to existing models.
Finally, it also allows a relatively small operation like Volvo to build everything on a flexible production line. This means a single line can produce the XC90 alongside the other new-generation vehicles.
Apart from SPA, Volvo is investing on an entirely new drivetrain that’ll power all future models: Drive-E. Already found in the 2016 XC60, Drive-E shows Volvo’s commitment to delivering quiet and understated luxury. Instead of joining the horsepower wars, Volvo’s new gasoline and diesel engine, both with four cylinders, will offer unmatched fuel efficiency and low emissions. Plus, they’ll offer performance comparable to six or even eight cylinder engines.
The introduction of SPA and Drive-E will, according to Mr Kohonen, allow Volvo to complete with other premium carmakers on equal footing. However, instead of offering an increasingly complicated model line-up, Volvo will instead focus on delivering great products on a simplified product structure. “With Volvo, it will be a case of small, medium, and large. It’s as simple as that,” said Mr. Kohonen.
It’s still too early to say for sure if Volvo’s move to put all its eggs in the SPA basket will work, but the initial signs are encouraging. The all-new XC90 has been a sales success for the brand while scooping up 55 international awards to date. And this is just the start. Volvo promises even more new models for this year and together with its current stable of premium sedans, SUVs, and hatchbacks, Volvo is optimistic that 2016 won’t just be a banner year for the Philippines, but globally as well.