New and innovative models put Volvo on the right road
New and innovative models put Volvo on the right road
By John Aglionby
SWEDISH people do not have a reputation for stupidity, but one
might be forgiven for thinking they are trying for one on first
hearing what Volvo is doing in Indonesia at the moment.
At a time when the country's economy is struggling to stay
afloat, and when most people are tightening their belts in the
face of much-reduced disposable incomes, the Swedish car
manufacturer is attempting to revolutionize the nation's
automotive psyche.
Or at least the part which says that station wagons and luxury
cars are mutually exclusive concepts.
No upper-market station wagon has ever been a success in this
country but amid a flurry of high-profile advertising and media
hype, Volvo launched its V70, along with its sedan sibling the
S70, last weekend.
"We didn't plan for the economy," said Volvo's vice president
for Indonesia, Jack Dirckx.
"We planned the launch a year ago. Okay, so the circumstances
are not ideal, but it doesn't mean we should stop the project. We
should not be planning short-term anyway but medium to long-
term."
If that doesn't appear crazy enough in the current
circumstances, Volvo is attempting to revamp its own image in one
fell swoop at the same time.
Most Indonesians see it as a maker of safe, reliable but very
conservative cars, while most expatriates see its station wagon
as a family workhorse that you only need if you have at least 2.5
kids and a couple of dogs.
Neither is the natural partner of young, rich executives,
Volvo's new target market.
Sales figures for the last couple of months, however, indicate
that Volvo is doing something right at the moment.
While Mercedes and BMW have seen sales drop by up to 50
percent, Volvo's share of its market has increased from less than
7 percent to more than 14 percent.
Other statistics tell a slightly different story. While Volvo
is the top seller of company cars in its market segment,
Mercedes-Benz and BMW sell many more vehicles when individuals
are paying themselves.
But with a new slogan, Passion for life, Volvo reckons it can
change this, and do so by selling station wagons.
Dirckx believes one should not be looking backward but
forward.
"We certainly see a different public that have different
values and a different lifestyle to a few years ago. That is why
we have launched the V70," he said.
Hence, the massive publicity drive. It is as if Volvo is
trying to convince people that they can break out of the confines
of the national psyche, and survive.
And it is helped by having a much-changed product from what
most Indonesians are used to, one that should convince people
that perhaps Swedes are not so crazy after all.
More than 1,800 changes have been made to Volvo's previous
station wagon, the 850, and the vast majority of them are
definitely improvements.
Many are obvious on first glance. The V70 looks much sleeker,
much less of a rectangular box, than the 850.
There are more curves than straight edges, the windshield is a
case in point, and the hood and front grille are sloping, which
add to the elegant appearance.
In short, it does not look so much like a Volvo. Whether these
are enough to attract the country's yuppies remains to be seen.
The S70 looks almost the same from the front, but its more
traditional right-angled trunk gives it a more conservative feel
and it is doubtful whether this model will attract converts away
from other makes.
Volvo is also stressing its commitment to protecting the
environment. By choosing to buy a Volvo, the company argues, one
is backing the manufacturer that is doing the most to protect the
environment.
This is a moot point, especially in Indonesia, where little
progress is visible in the campaign for more environmentally
friendly vehicles.
Dirckx accepts this but says any action is better than no
action. "If the government doesn't take the initiative you cannot
expect people to do so. And at the moment the environment is not
the government's first priority. But with the forest fires, there
will be more focus on the environment, which will trigger more
consciousness about greener cars."
Five versions of the S70 and V70 are available in Indonesia,
although as their images are so completely different it is more a
case of two V70s and three S70s.
For anyone doing much driving in a big city, it would make
more sense to go for an automatic transmission, although in the
V70 this is only available in the more expensive T5 turbo
version.
Expense is a factor that will play a large part in making up
many people's minds whether to buy one. Prices range from Rp 155
million (US$45,500) for the S70 SE to Rp 204 million for the V70
T5, or five times the price of a new Kijang.
Having said that, Volvo is not trying to sell as many V70 and
S70s as Astra is trying to sell Kijangs. Its target for the end
of this year is 300 cars, or 35 percent of total Volvo sales, and
720 out of 1,200 total sales in 1998.
Only time will tell if these goals are reached. Volvo and its
Indonesian partner PT Indomobil, deserve success for leading the
way into a new market -- Mercedes and BMW are following much more
meekly -- and they have a good enough product to achieve it.
It is now up to the market to decide if it wants to change its
long-held views.