Volvo Revamps Strategies To Fight Back Germans (Merc, Audi, BMW)


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Indian luxury car market: Volvo reworks strategy to counter German carmakers

Even as German luxury carmakers - BMW, Audi & Mercedes Benz - slug it out in the Indian luxury car market, Swedish carmaker Volvo Auto India, a fringe player but now backed by its new Chinese owner Geely Automobile, is working on a plan to corner a sizeable share in the Indian luxury car market.

In India since 2007, Volvo's future strategy was always fluid with its erstwhile owner Ford selling off the company.

Long considered a non-entity, Volvo Auto India, which is now owned by Chinese auto major, is reworking its strategy. Such is the seriousness that the company had a meeting of over 50 senior officials from Sweden in India, where a new future strategy was drawn up under the leadership of the new managing director.

Tomas Ernberg, managing director, Volvo Auto India, told ET, "We came in 2007 and we were a little bit staid and stagnant. But things have changed significantly under our new owners. We have formulated an India strategy, which was approved by our global CEO, Steven Jacoby, himself."

The new strategy envisages the launch of one new car a year for the next five years powered by smaller, fuel-efficient engines on next generation platforms. The powerful V6 and V8 engines will be replaced by 1.6 litre and 2 litre engines on all its cars.

On the cards are a possible transition from completely-built imports to assembly of vehicles, line up compact models like a crossover in 2013 to take on BMW X1, Audi Q3, among others, and a wider dealer network.

The company has doubled its marketing spend and will be sponsoring Lakme Fashion Week to improve its image among the elite. It has also doubled the workforce in a short span of six months. Currently, Volvo has four vehicles in its portfolio - XC90, XC60, S80 and S60 - and with these cars it's already addressing 80% of the market, said Ernberg.

Despite importing cars as completely-built units, Volvo has been pricing its cars competitively against the Germans. And the exploration of local assembly plant is seriously under consideration at the headquarters.

"We have an industrial business unit, which is looking at different possibilities for production sites in the US, Brazil, Mexico and India. The investigations are ongoing, but still no decision has been taken, but we are looking into that very seriously," added Ernberg.

This year, it aims to sell 1,000 cars, which is a 300% jump over 2011, and to add three more dealerships in Bangalore, Ahmedabad and National Capital Region in 2012. It also plans to add two or three dealers every year.

"It will be tough in the short term, but we have a long-term vision of achieving a 15% market share and 20,000 units annual volumes out of India. We are doing well in some of the markets, like Hyderabad, where we have a 20% market share and where we are beating Germans month-on-month. We want to replicate the same success in other regions."

According to experts, Volvo is on par with German trio of BMW, Audi and Mercedes Benz.

Adil Jal Darukhanawala, editor, ZigWheels, said: "Engineering-wise, Volvo cars are in line with their German rivals, but the brand awareness is lacking among the Indian car buyers."

"Volvo in India suffers from feeble sales network. Volvo Auto needs to address the branding and dealer network very quickly to reach a certain scale to take on the Germans," Darukhanawala said.

Indian luxury car market: Volvo reworks strategy to counter German carmakers - The Economic Times
 

350Z

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Re: Volvo Revamps Strategies To Answer Back Germans (Merc, Audi, BMW)

Situation of Volvo in India is quite similar to that of Fiat. Both are competent carmakers. Both have excellent products in their hands. But what’s wrong? Perhaps limited range of models, lack of brand image and no proper marketing strategies. Anyways, Glad Volvo is seriously doing something about it. I feel more excited to see a rare Volvo on roads than any other similar premium car, say a Mercedes Benz. Even the lowest model, S60 looks striking enough.

Drive Safe,
350Z
 
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Re: Volvo Revamps Strategies To Answer Back Germans (Merc, Audi, BMW)

S60 looks striking enough.
Drive Safe,
350Z
S60 is a stunner compared to it's staid looking german rival's and currently Volvo's pricing too is very accurate, but they need to start spreading their dealer's across the country quickly, moreover it wont be easy for them to compete with German's whose brand has more value in our country.
 
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Re: Volvo Revamps Strategies To Answer Back Germans (Merc, Audi, BMW)

S60 looks striking enough.

Drive Safe,
350Z
S60 is indeed a striking car on the road, I have seen only 1 or 2 of them here in Hyderabad but only on the Jubilee Hills side. I do get impressed with its road presence as well & it kind of stands out even with the likes of Audi & Benz SUVs beside it
 
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Re: Volvo Revamps Strategies To Answer Back Germans (Merc, Audi, BMW)

If one thinks in perspective, the Volvos are leading the luxury bus brigade! The luxury bus market was totally non existent say 10 years back, yet they managed to move first & capture it. If they same company could create a market out of zilch how does the same company falter so badly on the passenger vehicle market, one wonders!
Its defiantely great news that theyv'e woken up from their slomber. They need to open more showrooms & workshops and conduct all India drives to make people aware that they can build good cars too. But Volvo needs to be careful as to the fact that people might think of them as a TATA , a company who makes trucks & buses, but not good cars- an image Tata has tried hard to shed & has been successful too!!!
 
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Re: Volvo Revamps Strategies To Answer Back Germans (Merc, Audi, BMW)

Jazzy, Volvo car's and commercial vehicles both are separate entities Volvo car's are now owned by Chinese company called Geely and it has nothing to do with the Volvo Commercial Vehicles.
 
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Re: Volvo Revamps Strategies To Answer Back Germans (Merc, Audi, BMW)

Swedish manufacturer Volvo, currently backed by Chinese auto maker Zhejiang Geely Holding Group is weighing its options to establish an assembly unit in India. Sources told the Times of India that Volvo has two places under consideration for this project, which are the hotbeds for automotive investments – Sanand in Gujarat and Chennai in Tamil Nadu.

The Swedish auto major is mostly expected to decide on Sanand over the Chennai, as the delegation from Volvo is said to meet the Gujarat Chief Minister in August.
Volvo is currently running its passenger car business by selling completely built units of cars manufactured in Europe. It seems Volvo is impressed by the growth percentages of luxury car brands Audi and BMW who arrived on the scene 4 years ago. Volvo, which is technically equivalent to the German auto makers, does not have that brand recognition factor like BMW or Audi. People are better aware of the Volvo buses and trucks than their passenger cars in India.
However Volvo officials say they haven’t yet decided on the location of the plant.
Tomas Ernberg, managing director, Volvo Auto India has told the media time and time again that they are aiming to capture 15% of the market share in the luxury segment by 2020, but a decision on an assembly plant has not been taken.
In 2012 Volvo aims to sell 1,000 cars, which is a 300% jump over last year and the auto maker also plans to add exclusive dealers at New Delhi, Bangalore and Ahmedabad by the end of the year.
Much of Volvo’s lineup also needs replacement, and that’s likely to happen starting from 2014 when the Volvo Scalable Architecture starts producing results in the form of next generation cars.


Read more: Sanand or Chennai for Volvo India CKD plant?
 
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Re: Volvo Revamps Strategies To Answer Back Germans (Merc, Audi, BMW)

Volvo Cars, a Swedish luxurious automobile manufacturer founded in Gothenburg, Sweden has announced its association with crème de la crème fashion property, Lakme Fashion Week as the “Official Car Partner”. Volvo Cars will be part of the Lakme Fashion Week and set its foot in the fashion arena with Fashion Diva Ritu Beri. The two “Icons of Luxury” will showcase designs which have stemmed out of a common philosophy of ‘Designed Around You’.

‘Designed Around You’ is the brands translation of going an extra mile to understand customers better. This human-centric approach enables Volvo Cars to know the pulse of the customers and gauge what they desire in a product. With this thought the brand places the customer at the heart of its design. Every Volvo car boasts of cutting-edge technology with engineering that is executed around human values.

Commenting on this foray, Mr. Tomas Ernberg, Managing Director, Volvo Auto India said, “Our synergies with Lakme Fashion Week reflects our common understanding of people and our endeavour to offer them products that are stylish, sophisticated yet personal. In keeping with our philosophy of “Designed Around You”, Volvo Cars will showcase fashion through a completely new prism – through the eyes of a fashion icon.”

Volvo Cars has made a significant impact internationally and in India by winning several coveted awards for its design and style. To know more please log on to www.media.volvocars.com

Volvo Auto India has received many accolades after it has established its presence in India in 2007 and it currently has dealerships across various cities in New Delhi, Mumbai, Chandigarh, Coimbatore, Hyderabad, Chennai, Kochi and Pune.

Volvo Cars has four different luxury models including the Volvo XC90 – A 7-Seater SUV, Volvo XC60 – A Compact luxury suv, Volvo S80 – A Elegant sedan and Volvo S60 – A Sporty sedan.
 
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Re: Volvo Revamps Strategies To Answer Back Germans (Merc, Audi, BMW)

Taking cue from its German rivals Mercedes, BMW and Audi, Swedish luxury car maker Volvo Auto is considering the launch of an entry-level product to bring more consumers into the brand’s fold in the Indian market.

Sudeep Narayan, director, Volvo Auto India said, “We had earlier thought of introducing the Tourer V40 but decided in favour of a new entry-level product. The product would make its global debut at the Paris Motor Show. It is expected to be introduced here within the next six months.”

Though he did not share any detail on the product, industry sources say it could be the sports wagon V60, which would be unveiled by the Swedish company at the Paris motor Show in September. The vehicle would be available in five petrol variants, with engine capacities ranging from 1.6 litres to three litre. It would also have three diesel variants, with engine capacities of 1.6 litres, two litres and 2.4 litre engines. The V60 is expected to be priced sub-Rs 25 lakh in India.

Volvo Auto India sells sedans S60, S80 and sports utility vehicles XC60 and XC90. All these are priced between Rs 25 lakh and Rs 49.50 lakh (ex-showroom, Delhi).

Narayan said, “We are eyeing sales of 800 units this year. From 2013, we plan to introduce one new product in the Indian market every year and double volumes year-on-year. In the long-term we are looking at annual sales of 20,000 units.” By 2020, the projected volume is expected to give Volvo a share of 15 per cent in the country’s luxury car market.

The company (which has eight sales outlets) is expanding its footprint in India by doubling the number of dealerships by the end of 2013. It has also doubled its marketing expenditure.

Volvo is also understood to be considering setting up an assembly base in India. Currently, the company’s products are imported as completely built-up units.

Volvo Auto plans to launch entry-level sports wagon
 
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Re: Volvo Revamps Strategies To Answer Back Germans (Merc, Audi, BMW)

At the end of the day, Volvo is Chinese & also Volvo is not a brand which many would stay with. It is very difficult to beat marques like Merc, even BMW & Audi can't beat Merc at brand value, forget Volvo.
 
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Re: Volvo Revamps Strategies To Answer Back Germans (Merc, Audi, BMW)

It’s difficult to zag when every bone in your body says zig. But it’s precisely this strategy that helps leaders in any industry to stay ahead of the pack. Volvo Auto India may prefer to stay away from the numbers game in the Indian automobile market, but it wants to bring the brand back into the limelight by treading a course different from the rest. At a time when most car manufacturers seem to be launching new cars every second month or upgrading existing products, it plans to stick to its one-new-car-a-year strategy for the next few years. In a recent interview to Rajarshi Bhattacharjee, Tomas Ernberg, managing director, Volvo Auto India, explains the company’s India strategy.

How has Volvo Auto India changed following the change in ownership and new management taking over?
For the first time ever, we are a stand-alone company. We now have an owner who doesn’t interfere much in the business. We were a little unsettled in the Indian market earlier. Also, because of the financial crisis worldwide, Ford wanted to focus on the home brand. The new ownership has a more long-term vision for the brand in India, and aims to turn Volvo into the world’s most desired luxury car brand. This has given Volvo a new motivation.
Last year we also saw a lot of Volvo executives traveling to India, and going through brain-storming sessions. We invested time and effort understanding the Indian market and consumer mindsets. We also spoke to Volvo trucks and buses in India for their experience and business insights.
We have significant investment plans for India. Presently, we are doubling our physical offices space, changing our marketing strategies, increasing marketing budget by 2.5 times and much more. Our aim is to see Volvo grab a share of 15 per cent market share in luxury segment by the year 2020. This is an ambitious plan considering that in 2011, we were 1 per cent of the luxury passenger car segment of India. This means an estimated sales of 20,000 cars by the year 2020.

But increasing production is just one part of the story…
One of our key strategies is to grow our network in India. Today, we stand with seven dealers in eight locations of the country. For the past few months we have been receiving daily enquiries from companies and private people who want to become Volvo dealers/franchisees in different parts of India. We could open up 10 new dealers in the next two-three weeks. But that’s not what we want to do. We want to increase our network but we will do it our way by identifying the right partner in the right process for our long-term goals. We are taking our time. We have identified three more locations Bangalore, Ahmedabad and Delhi-NCR to expand.
The second part of the strategy is to raise the brand awareness. Among the range of engagements is organising the Volvo World Golf Challenge which takes place in 26 countries of the world. Volvo has been associated with golf since 1988 and the Volvo Golf Challenge is something that no other car brand has. It is different from the point that the tournament happens in different parts of the world and we take the winners to the world finals. Golfers and people who love golf know about this and are crazy about this challenge. The other is our association with Lakme Fashion Week in Mumbai, where we are the car partner. As such, our brand awareness strategy includes pumping in more money into traditional marketing, hoardings and other form of advertising. We are also investing in Information Technology so as to integrate our dealer network, monitor them and increase our conversion ratio.
Our strategies for India also include offering more products. We have four products for India now and have plans to launch the fifth car by the first quarter of next year. From the head quarter’s standpoint, there is a lot of emphasis on the product. We are going to launch one car every year for the next three to four years.

At a time when most car manufacturers seem to be launching new cars every second month or upgrading existing products, why do you want to stick to this one-new-car-a-year strategy for the next few years? Is it possible to go slow and stay top of mind at the same time?
The car(s) you are referring to here belong to completely different segments. Volvo is, and will continue to hold its ‘luxury’ positioning. If you look globally, Volvo Car Corporation is 1 per cent of total industry. We don’t produce five cars every year. We don’t have that capacity. We have two factories, one in Belgium and the other in Sweden, and have an assembly plant in Malaysia. We are working on two more factories to be opened in China - the first among the two is likely to be completed by the summer next year. Volvo will never be selling 5 million cars. Our global target for the year 2020 is to roll out 8 lakh cars.

What role does technology play in your overall strategy? Volvo has been focusing on fuel-efficient engines on next-gen platforms. Is it because you see a more lucrative market for fuel-efficient cars in India?
Our CEO Stephen Jacobe mentioned in one of the last motor shows in Europe that our core value is life. We take a lot of care in the material we use, in safety and security and of course engine efficiency. Describing the future, our CEO has indicated that we are going to have much more fuel efficient engines and at the same time increase the output and efficiency of the cars. In a couple of years’ time we are going to introduce cars that will be more powerful than what we have today.
With superior technology, we are going to increase the fuel efficiency and also ensure that they are environment friendly. We will continue to keep our focus on the luxury car segment and will also attempt to reach our customers with more and more value. Our engines are going to be small, efficient and yet very powerful while also being environment friendly. So we will not take out the fun, but turn the engine more close to our core principle of life. In fact, the emphasis on environment friendly features differentiates Volvo cars from other car brands in the luxury category.

You have also doubled your marketing spend for this financial year. What works better in a segment like yours — mass media or consumer contact programmes?
Our marketing budget has been more than doubled this year. We want to focus a lot on reaching our customers on a one-to-one basis. Our focus is the 5 per cent high net worth individuals in India who can afford to purchase a luxury car. If we are only putting ads in newspapers, it will be like shooting blindly in the air, as we will not be able to reach out to our prospective customers in the best way or measure the reach. So we try to reach out to our customers on the golf platforms, in our association with the Lakme India Fashion Week. We try to identify what kind of publications and newspapers our customers like to read.
For example, many brands in India would like to associate themselves with the Lakme India Fashion Week. But Lakme loves to associate with companies like Volvo which has a certain image worldwide. At the Lakme India Fashion Week we see a lot of high net worth individuals who care about design, fashion and have experienced a drive in a Volvo car once or twice. When a high net worth individual actually drives a Volvo car and experiences the drive, there is always a higher chance that he will want to purchase it. It is an experiential engagement tool that we are banking on. At the show, we will not only display Volvo cars, but will also have courtesy cars for the guests, designers and models. All the marketing activities that we do are bifurcated into sharp targeting and engagement.
Take another example. We take out a business magazine, which can be read by the junior management as well as the senior management in a company. So we do a communication within that community by targeting only those thousand CXOs. There are specific communications that go with the magazine which the junior management might not get to see and only reaches the thousand high net worth individuals we are targeting. This is what we mean by sharp targeting. We will also augment engagements with our products at various HNI touch-points like luxury malls and airports to name a few.

After-sale services have always been a decisive factor for customers in this subcontinent, and in fact, across the world. How are you beefing up your distribution and after sales services?
Volvo car customers in India today are quite happy when it comes to their experience with their cars and services. We don’t have coverage across all major Indian cities at the moment, but wherever we have presence we offer services 24 hours, 365 days. For this, we look for dealers who can take care of customers 100 per cent.
To ensure better service, we also guide and educate our dealers on the best-in-class services and efficiency models. In order to increase attention, we engage our dealers in different activities like dealer-technician interface. We do different programmes together, emphasise on training and build motivated teams.
Although we are just about four years old in India, some people at our customer service section and some other positions have been working for Volvo for 15 years or more. They know Volvo inside out. Most of them were non-resident Indians who were working with Volvo at different locations of the world and were brought back when Volvo entered India. Even among the dealers, there are technicians who have been working for 10 odd years, who have been brought back from other locations of the world. These people are neither new to the machine nor to the brand. This makes a lot of difference in dealing with the customers, after sales services and motivating dealers.

You just said you have been around in the country about four years now. How would you assess Volvo Auto India’s overall performance during this time? Is there something you need to work on at the moment given the overall economic slowdown?
If we look at statistics, we see total annual volume of passenger car sales in India at around 2 million and its luxury volume includes around 5,000 cars, which is 1 per cent. So it is a very small segment in India. The worldwide average is 10 per cent. Our projection is to bring in significant increases in the luxury business of cars. A couple of years back, the share of luxury cars was 0.1 per cent of the total. You can see how it has increased and we estimate the share of luxury will be around 3 per cent by 2020. So, the potential is evident.
To answer your second question, it sounds like a cliché but I have to say that for the moment things appears good for us. Although there is a negative sentiment as well as the possibility of an increase in custom duties, but we are in firm ground. May be because we have a small base right now. All said, our growth curve is following our planned path.

Our marketing strategy focuses equally on sharp targeting and engagement: Tomas Ernberg
 
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Re: Volvo Revamps Strategies To Answer Back Germans (Merc, Audi, BMW)

VOLVO INDIA TO LAUNCH V40 CROSS COUNTRY CROSSOVER IN MARCH 2013 AT A SUB INR 30 LAKH PRICE TAG

Come March 2013, Volvo India will launch an all new product in the form of the V40 Cross Country Crossover. Essentially, the crossover version of the V40 hatchback, the Cross Country will compete with the likes of the BMW X1 and the Audi Q3. The Chinese Geely owned Swedish car maker has just showcased the 2013 Volvo V40 Cross Country at the ongoing 2012 Paris Motor Show. This crossover is expected to be Volvo India’s entry level model and that signifies a sub 30 lakh rupee price tag. The Volvo V40 Cross Country Crossover will be brought into India through the completely built unit guise.

Both petrol and diesel engined variants of the Volvo V40 will be offered in the Indian car market. Internationally, the Volvo V40 Crossover gets six engines, all of them turbocharged. The three turbo petrol engines are the T3, T4 and T5 units. While the 2 liter-4 cylinder T3 engine produces 150 Bhp-240 Nm, the T4 engine is a higher state of tune of the T3 engine and is good for 180 Bhp. The top of the line, inline-5 cylinder T5 turbo petrol engine delivers 254 Bhp-400 Nm. While the T3 and T4 petrol engines are mated to six speed manual transmissions, the T5 engine gets a 6 speed automatic gearbox.

The three turbo diesel engines are the D2, D3 and D4 units. While the D2 engine is a 1.6 Liter-4 cylinder unit good for 115 Bhp-270 Nm, this engine won’t be available for the Indian car market. What India is expected to instead get is the D3 and the D4 turbo diesel engines which are 2 Liter-4 cylinder units that produce much more power and torque. While the D3 engine pumps out 150 Bhp-350 Nm, the D4 unit is the range topper with 177 Bhp-400 Nm. The D3 and D4 engines will be mated to 6 speed automatic transmissions, when launched in India.

The top end T5 engined Volvo V40 Cross Country will get the all wheel drive option while the rest of the line up will have to make do with a front wheel drive. Volvo will also offer hill hold and hill descent control on the top end T5 AWD variant. The Start-Stop system will be standard on all engine options. Since we’re talking Volvos here, rest assured that the V40 Crossover will be loaded to the gills with safety features like the Pedestrian Airbag Technology, Pedestrian Detection with Full Auto Brake, City Safety system which incorporates automatic braking, Collision Alert, Bending Xenon Headlamps and many other features apart from the standard airbags, ABS, ESP and traction control features.

Volvo India to launch V40 Cross Country Crossover in March 2013 at a sub INR 30 lakh price tag | IndianCarsBikes.in
 

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Re: Volvo Revamps Strategies To Answer Back Germans (Merc, Audi, BMW)

VOLVO is one among the safest cars in world and current S60 is a good machine to drive with different technologies like Pedestrian detection system and city safety.
And Volvo V40 is the worlds first car to have Pedestrian Airbag.
 

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