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.