A Break from the Past: Volvo and its Malcontents

Abstract

By the start of the 1990s Volvo had managed to establish itself with a clear and consistent brand identity, a unique manufacturing strategy and a loyal customer following. The world around it has changed drastically since the start of the second automotive century: shifting economies of scale due to an expansion of model range and shortened product life cycles, new efficiency imperatives and a changing competitive landscape in the near luxury segment have placed Volvo’s modus operandi in peril. In this chapter we will briefly touch on the failed merger with Renault in 1993, and leap forward in our discussion to start with Ford’s purchase of Volvo in the spring of 1999. Over the following eight years, Volvo has become an integral part of Ford’s Premier Automotive Group, a move which has resulted in a major expansion of its product range, through product sharing with family partners. We will comment on the success of this merger and — given Ford’s recurring yet conflicting statements of intent to sell Volvo on — also comment on the long-term future for Volvo.