What is holding Volvo back in the US?
Their value, luxury, and style should vault them to the top, but what is preventing American's from buying Volvo
Volvo's Exposure Problem
When you think of the top luxury sedan and SUV builders, you probably think of BMW, Mercedes, Audi, or maybe even Genesis. People often glance over the automaker that, in my opinion, makes some of the top luxury cars on the market today, Volvo. Much like Tesla, Volvo doesn't manufacture a wide variety of cars, instead choosing to make a few the best they can be. However, unlike Tesla, people forget about the small Swedish automaker when it comes time to get a new car. In 2020, sales of BMW's and Mercedes were each nearly triple the total number of cars Volvo sold. In fact, Volvo ranked second to last among the top 15 automakers for US sales in 2020, beating out only Jaguar. This didn't add up, because Volvo's appear to be one of the best choices if you are considering a luxury car. However, I believe Volvo's issue is not with their cars, but rather people's knowledge of them, their value, their luxury, and their understated style.
Value For Money
Today's luxury cars are getting more and more expensive. The cheapest 7 seater SUV at both BMW and Mercedes start at about 75k USD. Compare that to Volvo XC90, which starts at a very reasonable 49k and tops out at around 70k. In addition, that top of the line XC90 includes all the creature comforts you could want, and is a plug in hybrid that gets 55mpg. The comparable Mercedes GLS gets a frankly midieval 20mpg for thousands of dollars more. When looking at sedans, the story gets even worse. For less than 50k, you can get the high performance T8 AWD S60. This is Volvo's small sedan, comparable to cars like the BMW 3 series or the Mercedes C class. However, Volvo has given the S60 a hybrid engine making 400hp, which is capable of shooting the S60 to 60 in 4.3 seconds. To get that kind of speed or power from the equivalent Mercedes or BMW you would end up paying at least 10k more.
The Mercedes S class may be known as the epitome of luxury, but the Volvo S90's interior combines elegant style with comfortable seats and a firm yet forgiving ride. You can sit in ventilated and massaging nappa leather seats, listening to music on your 19 speaker Harmon Kardon stereo system, and relax while the 30k you saved by not getting the S class grows in your retirement account. This level of luxury isn't restricted to the S90 either. In nearly every model, Volvo outperforms the competition on their ability to make the driver feel special for a fraction of the price.
Where the issues come from
Volvo's issue isn't with their product, but with who knows about it. When I was researching this article, I was amazed to learn about some of the features that the new Volvo's have. Their cars generally have a great range, look amazing, include everything you would expect from a luxury car, all for less than you would pay anywhere else. There seems to be very little downside to buying one. However, the first thing that comes to people's mind when they think of a luxury car is often German or Japanese. People get caught up in the options that BMW, Mercedes, Audi, or Lexus present, and forget to look towards their peace loving neighbor upstairs.
How to fix this
In order to convert people into loyal Volvo customers, Volvo must show that they are more than the better option, but that they are so much better than the competition they are unavoidable. That is what Tesla did. They created the best electric car on the market, and created a loyal fanbase that will defend them no matter how bad their initial quality is. Volvo has the opportunity to do the same with the luxury hybrid market. They caught a lot of bad slack with the 112mph speed cap on their cars, but that's just a blip on what should be an incredibly successful hybrid car campaign. Mercedes appears to be going the full electric route, and BMW's appears to have hired the designer of the Kia Soul for it's recent cars. The luxury hybrid market is ripe for the taking, so it comes down to if Volvo can seize on the opportunity.
Let me know what you think. What do you think of Volvo's? Would you ever buy one?