In this comprehensive article, we will talk about marketing, branding, advertising & strategy of the Volvo brand of Cars & automotive extensions.
We will learn about below topics in detail (Jump directly to any section):
History of Volvo | How Volvo cars started?
Just like in most companies, two guys met; one was in sales & another was in manufacturing to start their car-making venture. On the 14th of April 1927 the first Volvo car, ÖV4 (Öppen Vagn 4 cylindrar), rolled out of a small town in Sweden named Gothenburg. The sales guy was Assar Gabrielsson & the mechanical engineer was Gunnar Larsson. The first model was built to withstand harsh Swedish weather laying the foundation for Volvo's sturdiness in times to come.
What's with the Logo of Volvo?
The iconic Volvo logo is the Alchemical symbol for IRON, a nod to the company's roots in metalworking. While the initial logo was simple, Volvo adopted the Iron symbol in 1930 & had a love-hate relationship with the symbol as they tried different variations over the years.
Here is a snapshot of Logo's history.
What are the Core brand values of Volvo?
The core of the brand represents the qualities (Tangible/Non-Tangible) that motivate consumers to buy the product. It enables an organization to formulate its Essence, Vision and promise. This value is then to be integrated while designing any product/service of the brand.
Below is the famous triangle of Pathos, Ethos and logos by Mats Urde to capture brand core values.
Let us put Volvo's core brand values in the above framework.
Let's put Volvo's brand which the company accepted in 1960 with the famous Kapferer Identity prism. (Check here to learn the basics of Identity Prism).
Who owns Volvo Company? How the ownership changed over recent times?
The first owners were of course the founders, Assar Gabrielsson & Gunnar Larsson. They formed Aktiebolag Volvo Company or AB Volvo, and listed it on the Stockholm Stock Exchange in 1935.
In 1977, Volvo tried to merge with Saab-Scania (another Swedish Company) to improve cost optimization but it failed to succeed in the merger & the idea was dropped.
In the 1990s, Volvo become very close in technology collaboration with French automobile giant Renault. In 1993, Volvo-Renault proposed a merger which was green-flagged by the French authorities but due to heavy opposition from Sweden, it couldn't materialise.
Finally 1999, Ford bought AB Volvo's Car business for a whopping $6.45 Billion. Volvo Trucks & Construction arm remains independent.
Ford sold Volvo cars to Chinese automobile giant The Zhejiang Geely Holding Group at $1.8 Billion, making a huge loss of the original investment. It was Ford's global strategy to focus on core & divest from its luxury car portfolio. E.g. Jaguar-LandRover to Tata.
So the current owner of Volvo cars is GEELY Holdings which also owns Lotus Cars (bought it from Ford again) and Polestar.
The company AB Volvo which owns Volvo trucks, Renault trucks, Mack & other industrial vehicles is an independent company where Geely hold 8.2% Share (2nd Largest). The largest shareholder is Industrivärden which holds 8.9% as per their last annual report (Link here)
Marketing Mix of Volvo | The 4Ps of Volvo Marketing
Product:
Vintage: Volvo is a 96-year-old company that saw multiple wars, famine and pandemics. They stick to their vision of Safety & durability while delivering world-class products.
Quality: Volvo may never be as swanky as Ferrari, as classy as Mercedes or as economical as Volkswagen but it will always be a top-notch Safe Family car with rugged durability.
Diverse Product Portfolio: Volvo sells Cars, Trucks, Buses, Construction equipment & excavators.
Engine: Volvo makes its engine under a subsidiary named Volvo Penta.
Service as a Product: So far Volvo has not innovated in the service element of the product compared to Mercedes which gives great assurance of free services, Breakdown and accidental support.
Place:
Distributor structure: Like most automobile manufacturers, Volvo has a strong distribution structure across the globe. In India, Volvo has 23 retailers spread across the country.
D2C Model: Volvo has innovated in the segment by selling cars online. You can buy the latest models of C40 and XC40 online. You can even customize the car on a website.
Partnership with Eicher India: Volvo is leveraging the distribution network of a strong Indian player Eicher to improve the distribution of Trucks, Buses & construction equipment.
Price:
Not Innovative: If you compare the level of innovation by BMW which provides an easy loan process, buyback guarantee & subscription base pricing, Volvo has not evolved enough.
Partnership with HDFC: Volvo partnered with HDFC Bank for buying options.
Promotions:
Print Media: Volvo advertises in Magazines & newspapers. TV advertisement isn’t a big part of their advertising mix for India while globally they are a big spender on ATL.
Digital Media: Online targeted ads on Instagram & other social media have been effective mediums.
Advertising (more about this in a later section): Internationally Volvo is known for dramatic advertising. E.g. Imagine a Volvo truck carrying 3 other Volvo trucks with their president on top of it.
Not big in ATL: Volvo has remained TV-shy in India.
Not big in OOH: Same as TV, Outdoor billboards have not seen a lot of Volvo advertising in India.
Product Mix | Product line extension of Volvo cars & Trucks:
Volvo Cars India: In India certain models in V Series and S Series aren't launched.
Volvo Trucks Global:
SWOT Analysis for Volvo
Strength of Volvo:
Brand: Reliable Brand image in Safety, Durability & Swedish heritage. It is the vintage brand that owns the word "Safety". Consumer group who keeps safety as their No. 1 priority will back Volvo cars.
Portfolio: Diversified portfolio in various passenger car segments. Apart from the passenger segment, Volvo has market leadership in Trucks and construction vehicles (Image 8).
Commercial EV: Volvo is a market leader in electric commercial trucks in European & North American markets. Volvo's focus on EVs is second to none as they rule the European market by a staggering 56% MS.
Parent Company: Access to parent company of car division & Volvo Truck's second-largest shareholder Geely Holding’s technology & cash
Synergy: Volvo trucks own Renault trucks, Mack trucks & Prevost Buses in commercial vehicles. It helps in improving overall market penetration using different strategies with different brands.
Research: Volvo spends around 5-6% of net sales on research & development. This includes recent strives toward vertical integration of Battery. It is targeting 35% of the overall vehicles to be electric by 2030 & phase out IC engines by 2040.
Market: Solid share market performance in the Last 5 Years. Also, their operating margin has remained stable at 10% in the last 5 years.
Weakness of Volvo:
Brand Recall: Volvo has failed to capture Top-of-Mind-Awareness (TOMA) among Mellienials & GenZ. BMW, Mercedes & Audi score way above Volvo in awareness quotient.
Lack of brand innovation: From the branding perspective, Volvo failed to evolve with time. Currently, Volvo is being associated mostly with Buses & Trucks. It lacks the freshness which other vintage brands like BMW, Audi & Mercedes somehow succeeded in rekindling.
Ownership Change: Multiple changes in ownership from Ford to Geely along with various failed mergers leads to lacuna and uncertainty.
High Debt: Volvo has a high debt of >$20 Billion which is quite common in the auto industry.
Opportunity area for Volvo:
Future is EV: Tap into the EV market which is growing at a 3Yr CAGR of 17%. Volvo has very high EV readiness compared to other major players. (Image 9).
Young Markets: Automobile sector in emerging markets such as the Indian subcontinent, Africa & Latin America.
Autonomous driving: Embracing digital technology in Autonomous segment.
Other Segments: High growth in commercial vehicles & industrial speciality vehicles.
Threats for Volvo:
Fuel Cost: Increasing cost of fossil fuel & reliance on the Middle East & Russia for oil.
Stringent Laws: Ever-changing laws on diesel and gasoline restrict the sale of certain categories of cars (SUVs).
Clean Energy: The world is shifting toward clean energy such as Natural Gas & Electric. The phenomenon is across passenger & commercial vehicles.
Brand Positioning Map for Volvo Cars (This does not represent Trucks):
Volvo endeavours to balance practicality with sportiness. It is uniquely positioned for a mature consumer who understands the value of inner qualities & isn't swayed by vanity.
Advertising Strategies of Volvo | Marketing Campaigns of Volvo
Volvo spends around 5-6% of its revenue on Selling expenses which includes marketing & advertising. Volvo actively engaged in integrated marketing campaigns where it leverage the potential of Digital and traditional media.
The central message in advertising Volvo are below:
Showcase impossible things using Volvo Technology & Creativity. Be Bold.
Value Family's bond & showcase the importance of safety.
Value Life & Diversity.
Aspire to do great things. Believe in yourself.
Consumer centricity.
Few strategies implemented by Volvo along with noted campaigns from 2020:
The unorthodox bold marketing (EPIC SPLIT): Volvo knows how to push the boundaries of marketing. The first campaign is the famous Volvo Epic Split by Van Damme came 10 years back. This video is just transcendental to watch. One of the most epic advertisements ever where Van Damme actually (not fake) did a complete split between two Volvo trucks going backwards (read this again).
The ultimate Volvo Truck Stack (2020): If you think, the Epic Split is unbeatable, watch this unbelievable stunt performed by a Volvo truck carrying 3 trucks on its shoulder creating a tower of trucks while the company's president Roger Alm, standing at the top of it all. It was all REAL. (It was inspired by old Volvo ads on Car towers)
Technological Advancement (2016): The Flying Passenger Campaign; this campaign demonstrates the superior technology & fuel efficiency of Volvo trucks. Here Volvo attached a paraglider at the back of its truck while the truck treads an uphill journey.
Emotional Short-film (2017-2023): This one brings tears where the life journey of a small girl is being portrayed with an almost anti-climatic ending.
You may check "Human Made Stories" under the Defiant Pioneers campaign where Volvo celebrated innovation by Humans.
In 2023, Volvo kicked off with Volvo "For Life" Campaign with a beautiful short film encouraging people to face their fears while smartly including the importance of safety while conquering fears.
Celebrating Family & Diversity (2018): Volvo captured the two most important things, Family & Diversity in their 2018 campaign named "The Family Icon". It reinstated its positioning as a Safe Family car which celebrates diversity & doesn't carry traditional biases. It is also an attempt to rejuvenate the brand's Image from a Traditional conservative Swedish brand to a modern open brand.
Launched a children's Book (2019): Focusing on the environment & children, Volvo launched a beautiful book titled "The Day the Ocean went away". It is a smart move to activate brand equity among future consumers.
Making a big move in the EV Segment (2021): The campaign "Ultimate Safety test" launched in 2021 amalgamates the traditional Volvo Safety and conservation of the Planet. In the campaign, Volvo cleverly covered their highest safety standards along with a stark message of melting glaciers.
It announces boldly that they are coming in EVs Big Time. Multiple reports claim that Volvo is one of the top-most EV-ready car-makers.
Future Focus of Volvo:
To be 35% electric by 2030 & to completely shift from Internal Combustion engines by 2040. Along with EVs, natural gas & alternate fuels are to be explored to support the mission.
Focus on vertical integration for the Battery module. It will help Volvo to remain competitive in the next wave of EV innovations.
To become the market leader in the Truck segment across all continents. Volvo is a market leader in Europe & North America. Asia will be tough to conquer other continents are achievable.
To build brand equity among GenZs while keeping the positioning of the brand focused on Safety and family.
To create a sustainable ecosystem by supporting the environment.
To embrace digital & AI for future innovations.
Leaving you with the OG ad of Volvo in 1970 to defy the normal. Savour it!
Author: Gunjan Solanki
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