What Volvo Can Teach You About Rebranding
Volvo has an interesting history. Founded in 1927 in Gothenburg, Sweden, the company has stayed relatively small yet punches way above its weight. A safe and reliable marquee, it sold saloons for the middle aged accountant and estates for the landed gentry.
Engineers joked that Volvo designed super strong cars for rough Swedish roads and that’s why they would last for decades on the smooth tarmac of middle and southern Europe.
Over the years, Volvo developed a worldwide reputation for reliability, safety and innovation, and with it attracted a diehard customer base of sensible motorists. Writing for Wired.com, Matt Hardigree joked that Volvo’s target market was the type of person who, “lived in a suburb, and likely had a preferred translation of War and Peace.”
Unfortunately, that niche is a little too… well… niche and Volvo worried their approach wasn’t profitable enough. Concerns about the long-term viability of the brand steadily grew and in 1999 AB Volvo (the parent company) sold its passenger car business to Ford for a cool $6.45 billion.
This, unfortunately, is where Volvo’s story starts to falter.
The Ford Years
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When Ford bought Volvo in 1999, the marquee had a strong dealer network, impressive sales and a firm identity. Ford looked at that and thought, “Nah, this won’t do.” (There may have been more analysis involved but I wasn’t there so I don’t know precisely what was said.)
After a little deliberation, Ford decided to reinvent Volvo as a luxury brand to challenge the likes of Audi, Mercedes-Benz, etc.
Ford tossed out Volvo’s old vehicle platforms — the mechanical DNA of the car — and replaced them with shared platforms from American Fords, British Land Rovers and Japanese Mazdas.
Now, many of those platforms were good but they weren’t what made Volvos special. And many weren’t that luxury.
The Volvo C30, for example, was built on the Ford C1 platform, which is the same mechanical foundation as the Ford Focus. When you’re putting a car up against models like the Audi A3 and Mercedes-Benz C-Class, you need something a little more special than that.
It was a similar story across most of the cars released under Ford’s leadership.
While some cars were good — notably the ones still built on Volvo platforms — the re-brand didn’t really stick. Why? Because, as I mentioned, Volvo’s new cars weren’t premium.
Unfortunately, as you’ll see in a minute, things had to get worse for Volvo before they got better.
What Can We Learn From Volvo About Rebranding – 1?
Brand message is worthless if it’s skin-deep. Telling people your product is premium when it’s build on cheap foundations is a recipe for disaster!
The Geely Rebrand
By 2006 Volvo was struggling. Ford’s luxury experiment hadn’t worked and sales were slumping worldwide. Two years later, the global financial crisis kicked in and obliterated the North American car industry.
Volvo, Ford’s confused marquee that was no longer known for its safety innovation and not quite regarded as a luxury brand, was on the chopping block.
Ford offloaded Volvo to Chinese automotive startup Geely in 2010 and this, thankfully, is where Volvo gets back on track.
Geely had watched Volvo flounder under Ford’s leadership and knew that Ford’s strategy wasn’t the right one. While the attempt to turn Volvo into a luxury marquee wasn’t a bad idea, it was done in such an un-Volvo like way that it was always doomed to fail.
You couldn’t just inflate the price and tell people Volvo was now a luxury marquee.
Geely axed all the mass-market flops like the C30, pumped money into Volvo-led R&D and launched a handful of new, innovative and quintessentially Volvo products like the second generation Volvo XC90.
Writing for LeaseFetcher, Will Craig describes the split between old and new Volvo as, “momentous. The Ford era cars are confusing products that look, feel, and drive like rebadged Fords. As soon as Geely came in, that all went out the window. Geely took Volvo back to basics and started designing cars that the old Volvo would have been proud of.”
What the re-brand did was create a fresh, new company that borrowed all the good bits of the pre-Ford company and added in the new premium aspirations.
What Can We Learn From Volvo About Rebranding – 2?
Brand is built on real products and services. If you infuse your business, your products and your services with your brand, that’s how people will start to see you.
About the Author
Tom Butcher is a freelance writer who recently escaped the world of print journalism. He covers a wide range of topics, including finance, business and motoring. You can follow his (new) Twitter page with this handle, @tombutcher_jour