Case study Volvo's heart will 'remain in Sweden' Volvo's safe, trusted cars - a mainstay of affluent suburban enclaves in the US and Europe - have been called many things. However, the Swedish brand has rarely been compared with a predator of the forest - at least until now. Li Shufu, the colourful chairman of Chinese car maker Geely, Volvo's new owner, on Sunday likened Volvo to a tiger penned in a zoo that needed to be let loose to run free in the broader world. 'I think we need to liberate this tiger,' Mr Li declared. At a ceremony in Volvo's hometown of Gothenburg, Mr Li's company signed Source: Alamy Images: Oleksly Maksymenko Photography. a deal to buy Volvo for $1.8bn from Ford Motor, marking the US carmaker's last dis- posal of an overseas brand and China's first purchase with a solid reputation for safety, but a dull and worthy of a premium western car marque. image among some consumers and an urgent need Mr Li told reporters that the Volvo tiger's 'heart' to raise its game. would remain in Sweden, where it has two plants, and The brand is still seen as an industry leader in in Belgium, where it has one. safety technology, though rival German brands and Geely's boss vowed to keep Volvo's manufactur Toyota's Lexus have recently matched or outdone it ing footprint in Europe, but said that the tiger's 'power in pioneering some safety features. should be projected across the world,' giving new life However, Volvo's reputation for building safe cars to its operations in mature markets. could help its business in China as safety becomes Volvo sits in the 'near-luxury' or 'only-just-upscale' an increasing priority in the world's largest car market. part of the car market, alongside rival Swedish In design, Volvo is moving away from making boxy, brand Saab and Fiat's loss-making Alfa Romeo - a square cars into more edgily fashioned, smaller and subsection of the premium market under attack from alternative fuel models - an area where Geely, which luxury leaders BMW, Mercedes-Benz, and Audi since is developing electric cars, can help it. the car industry's crisis began in 2008. Source: from "Volvo's heart will "remain in Sweden", Financial Times, The German brands' superior sales and higher 29/03/10 (Reed, J.). prices have allowed them to outspend Volvo on research and development, and ride out the crisis in fitter shape. Discussion questions Volvo's signature contribution to car industry 1 How has Volvo achieved differentiation over history is the three-point seatbelt, which it claims has the years? saved more than 1m lives since it pioneered it in 1959, prompting other car makers to follow suit. 2 Why did Geely acquire Volvo? The Swedish brand celebrated the belt's 50th 3 Suggest strategies for Volvo to build upon its birthday last year - a fitting event for a car maker unique strengths
