Ford taking risky step by moving Volvo upscale

As Ford gets ready to sell premium brands Jaguar and Land Rover, many have anticipated that Ford will also give up on Volvo. However CEO, Alan Mulally has repeatedly killed rumors of Volvo beings sold to other brands. Ford now wants to move the Volvo brand upmarket, hoping to replace what Jaguar and Land Rover once did for Ford.

Last month, Ford executive, Lewis Booth met with 300 of Volvo’s top managers and showed them a few slides of the company’s third-quarter results. Volvo, once again, failed to profit. He left the managers with one message: “Volvo must become competitive on costs and revenues and it must do it by becoming a legitimate premium alternative to rivals like Lexus, BMW and Mercedes-Benz .”

Booth believes this can be achieved focusing on the safety factor, which Volvo is well-known for, and on its simple Scandinavian design.

However, critics believe that Ford is taking a huge risk by trying to move Volvo upscale because it could leave behind traditional Volvo buyers. Not to mention that those traditional Volvo customers are very precious to keeping the company’s revenues stable at the moment.

“It’s not a change of direction, it’s just building on what they’ve got,” Booth, chairman of Volvo Cars and president of Ford’s European division, told The Detroit News. “We’re looking to take customers from everybody. We’re not going to achieve it by mimicking our competitors. We’re going to achieve it by being what Volvo is — a strong Swedish brand with the values of that society.”

Yeah, so this reminds us of an article we wrote a while ago about how a Volvo executive said that Volvo cannot afford to mimic the German brands and is an underdog brand. Oh well, only time will tell if Volvo can become a strong BMW or Mercedes rival.


Source: The Detroit News

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