Volvo Goes Searching for an Image

December 7, 2001

Sacramento - Ford has been making some organizational changes in its Premier Group of luxury cars recently and we warned a week or so ago in reporting some of those changes that it would be difficult for a group of luxo-status personal cars to co-exist in one business unit the way it was being reorganized.

Volvo may be the first casualty of that reorganization. There is word from Goteborg, Sweden that Volvo will seek to move out of the luxury car market and will launch a small car that would lead to higher production volumes.

Hans Olov Ollson, chairman of Volvo cars, was quoted in the Swedish press as saying, "We are leaving the luxury cars segment to Jaguar and we are discussing the launch of a smaller car. For us it is very important to grow and we can grow by going on to new sectors." Olsson also hinted that this new car, to be announced in six months and planned as a 2005 model, would share a large number of parts with other Ford cars.

To its credit, Ford has done a marvelous job with Jaguar, Aston Martin, Volvo and more recently Land Rover as units within its Premier Group. Each of these marques was distinctive and Ford, until now at least, has left them retain their distinctiveness, while at the same time providing the resources for them to grow and prosper. The recent reorganization of the Premier Group and this subsequent announcement about Volvo may be an indication that those days are over.

Volvo has worked hard for many years to earn the reputation of being ugly, but safe, durable and good value for money. The company gave up on the small car market in the early 1970s when it stopped making the P1800 (nicknamed the "poor man's Ferrari") and the P1800ES. Instead it has concentrated on building terrific family size sedans and station wagons with decent performance and comfort and high occupant safety ratings. It's hard to imagine what Volvo would be without that, nor does the world need another Ford with a Volvo badge.