For much of its history, the name Volvo has been practically synonymous
with safety. The Swedish brand has a long track record of safety
innovation. It has often been the first to introduce features now common
across the industry and for a long time enjoyed a reputation for going
quite a bit further than competitors to reduce the risks of simply driving
a car. The trouble for Volvo is that safety has become a far greater
priority for consumers and automakers alike than it had been earlier in
automotive history.
Technology has improved,r egulations have tightened and other brands are
catching up and are touting their own commitments to safety.
It's getting tougher for Volvo to distinguish itself as a safety leader.
Since it was taken over by the Chinese automaker Geely in 2010, Volvo has
been steadily hammering out a new, more luxurious image as a serious
competitor to German brands such as Mercedes and BMW.
Now it is also making a remarkably aggressive push into electric and
hybrid vehicles.
So far, it seems to have worked.
Volvo has frequently hit record levels of sales and profits in recent
years. In July of 2019, for example, the carmaker reported its best ever
first half year sales.
But the carmaker in 2019 began warning investors of shrinking margins
resulting from an ongoing global trade war and slowing global demand for
cars. In late 2018, Volvo abandoned plans for an initial public offering
over the same concerns.
And Volvo is up against some far larger and far more deep pocketed
competitors in its push toward an electric future.
This is an expensive transformation fraught with risks.
Safety has been one of Volvo's defining characteristics over the decades,
and the company has a long, solid record as a safety innovator.
One of its best known innovations is the three-point seatbelt as we know
it today, which is nearly universal in cars sold in the US and in many
other countries around the world.
The three-point seatbelt held a few serious advantages over these simpler
two-point lap belts, which had been common up to that point.
Three-point seatbelts secured both the upper and lower body of each
passenger in a vehicle, preventing the passenger from being thrown forward
into the dashboard from the waist up in the event of an impact.
Volvo also introduced the world's first prototype for a rear-facing child
seat in 1964.
The company was the first to introduce side impact and curtain airbags in
the 1990s.
Volvo created its own renowned whiplash protection system in 1998, called
appropriately whips.
Volvo was an early leader in the development of blindspot detection
technology. It also created its own rollover protection system in 2002.
In my observation, I think Volvo is a company that from very early on has
paid a lot of attention to safety.
And even today, the corporation says that safety is part of their DNA and
we will see that reflected in their products.
Apart from these innovations, the company has made other moves that
distinguished it as a brand, especially interested in protecting its
passengers. In the 1990s, Volvo, along with German automaker Mercedes
Benz, pushed industry groups such as the IIHS to pay more attention to
certain types of crashes the company felt were not getting enough
attention in tests.
Volvo continued to build cars that would protect against these impacts,
even though they weren't being tested.
The company was ahead of the shift that would come later.
Roll the calendar forward several years and we come up with a small
overlap crash test and we find that Volvo stuck to their to the research
that they had done back in the 1990s and continued to develop products
that would offer not only good protection and the moderate overlap crash,
but also the small overlap crash.
So Volvo products were among the first to earn good ratings in that new
crash test for us, where some of the other automakers, even though they
had had access to the same information that Volvo did back in the 1990s,
sort of ignored that crash condition until we brought it more forward
without with our crash test ratings.
But safety has become more of a priority for buyers overall and for newer
groups of customers who have an increasing degree of clout.
One such group is women.
More than 60 percent of car purchases are made by women and 85 percent are
influenced by them, according to data collected by cars.com.
And a survey from Kelley Blue Book found that safety is more important to
women car buyers than it is to men.
Automakers have taken notice, and while Volvo's products are still highly
regarded, there is just not the same distance between the best and the
rest that there used to be.
If there is a gap, it's much smaller than it used to be 20 or 30 years ago
for sure the attention that our Christmas programs have brought on safety
and the changes that have occurred with government regulation.
The government's own efforts toward consumer information have forced the
automakers to step up their game in terms of safety.
And I think the gaps are not as big as they once were.
IIHS names vehicles from several manufacturers to its top safety picks
list, including lower priced cars from Subaru, Mazda, KIYA and Hyundai.
So absolutely has a reputation for safety and certainly people.
So she Volvo would say the question really becomes is really are you
getting more safety today with a Volvo than your other cars?
And the truth is, is that while Volvo was innovators when it came to
seatbelts and a lot of crumbles owns a lot of things in the past.
Today, we're going to get a great deal of safety with many different
vehicles. So you really don't have to go and step up to a Volvo to get a
leading edge at safety anymore.
Now, Volvo aims to distinguish itself in other ways.
When Chinese automaker Geely bought Volvo in 2010, there was a certain
degree of skepticism over the acquisition.
Geely was a rather small Chinese automaker that made low cost cars for
Chinese buyers.
Volvo was thought to be on its last legs after years of ownership by Ford.
Geely paid $1.8
billion for the carmaker, a fraction of the $6.5
billion Ford had paid for Volvo in 1999.
After the deal was done, Geely Chairman Li Shufu said he thought Volvo
ought to try competing more with Mercedes and BMW.
But he also stressed that Geely would mostly leave Volvo alone.
So far, that plan has worked out with Geely's backing, Volvo revamped its
entire lineup, focusing heavily on sport utility vehicles that offer
understated luxury features and interiors.
The brand has played off its Swedish pedigree by designing its vehicles
cabins around the theme of Scandinavian sanctuary with plenty of natural
light and colors and materials that evoke nature.
The brand's sleek new aesthetic is widely considered to be a sharp
departure from the classic boxy and sensible family wagons and sedans
Volvo had long been known for.
That said, Volvo's name is still strongly associated with safety.
In Kelley Blue Book's brand watch survey, for example, Volvo is ranked
first among luxury brands for safety.
It's the only category where it leads, and a few recent moves suggest the
car company is as serious about protecting people as it has been in the
past. It said in March of 2019 it will share hundreds of research papers
based on data compiled by its traffic accident research team over the last
40 years. The project is called the Equal Vehicles for All Initiative or
EVA for short.
Part of the purpose of the initiative is to reduce disparities in safety
among different populations, particularly between men and women.
Which Volvo said results in part from heavy reliance on crash test dummies
modelled on men's bodies.
As you know that everything started really with Volvo cars heritage
related to the safety belt.
When we invited the solution, we decided to put it free for
everyone. If you find something that can save life safe, you shouldn't
give it out for free. To the other manufacturers so they can they can
learn. And a got project was related to all the knowledge, based on all
the tests that we have done with female drivers and all the facts based on
how they are structured and because we are different.
So I would say all of those facts and figures you should share.
The brand also has a stated goal of eliminating all deaths and serious
injuries from new Volvo cars by 2020.
to achieve this end, it's making some other bold decisions.
It said in 2019 it will limit speeds and all of its vehicles to a maximum
of 112 miles per hour and it will install cameras in every car made from
early 2020 onward.
We had long discussions about this, you know.
Driving a car it should be fun.
You should be able to relax because the car is supposed to help you and
support you. But we also know that when things are going a little bit too
fast, it is tougher to have control over the car.
And really, if we are very, very honest, you don't need to drive faster.
You need to kind of move fast between two different speeds, but you don't
need to have that maximum speed.
And I think that suits very, very well with the brand.
And also, we talked about the typical Volvo customer with what they are
asking for and their strengths and weaknesses.
I would say it fits quite well.
CEO Håkan Samuelsson said the move could lead some to see Volvo as Big
Brother, but added that if it can help save lives, it will be worth it.
But perhaps Volvo's most dramatic transformation is into a premium brand
comprised entirely of electric and hybrid vehicles.
Even though the company is still touting its commitment to safe cars, its
transformation into an entirely electrified car brand is perhaps gaining
more attention. Volvo has said it plans to only make electric or hybrid
vehicles from 2019 onward.
It is aiming for half of its global sales to be fully electric by 2025 and
the other half to be some kind of hybrid.
By that time, Volvo wants to have 1 million electric or hybrid cars on the
road. Volvo is pitching its move as both a bet on tighter emissions
regulations around the world, including key markets in Europe and China,
as well as a natural continuation of Volvo's focus on safety and
well-being. Even a recent advertising campaign nods to Volvo's safety
legacy while promoting its new focus on green vehicles.
But developing electric power trains requires money, which may be tight as
auto sales slow and companies find themselves caught in global trade
disputes. Volvo arguably benefits tremendously from its ownership by
Geely. Much of Volvo's sales growth came from China, and the two companies
have been combining operations in some areas to share costs.
However, Volvo is still a small fish compared with some of the other
luxury brands it is competing with in electric cars or otherwise.
So entering in the luxury market, especially as a European brand but not a
German is definitely tricky.
Because you're up against competitors have been doing it for decades that
are extremely well known.
Audi, Mercedes, BMW all have deep pockets, all have big marketing spend.
All have really big advertising budgets.
So it seems to me that Volvo is taking a different approach.
I mean, they announced that all their vehicles are going to be their
electrified in some way, whether it's a plug-in hybrid or whether it's
fully electrified.
And perhaps that is, you know, in terms of a strategy, their way to
differentiate themselves amongst the German brands because they certainly
get out German, the Germans.
So trying to go a different approach, grab a lot of as much luxury car as
possible. Maybe something they're trying to do.
They're trying to find their unique way.
And it seemed as if they put their their eggs in that electrified basket.
While Volvo sold 642,253 vehicles around the world in
2018, the BMW brand sold
2,125,026.
Volvo is also going head to head with illustrious brands such as Porsche
and the continuously buzzed about California electric carmaker Tesla.
But if it takes carbon emissions as seriously as it has taken safety, it
could end up engineering something as influential as its famous
three-pointed seatbelt.
It's a reason why these brand is growing is a reason why we attract new
customers. And that is a combination of all the design, design and safety
you now focus on on the environment.
And I think that the awards, we really appreciate it.
It's very good for our employees and engineers that we get kind of receipt
that we're doing the right things and I'm happy for that.
But I would say it's the total, everything needs to fit to fit together to
just have safety in the front seat; that is, of course, tremendous,
extremely good. But we really would like to work with every single part of
the car. That's the reason why we are strong.