Volvo: ownership

Volvo's 2011 rescue by Chinese automotive giant Geely marked the end of a troublesome spell for the Gothenburg brand; not the first time it has seen off adversity. Martin Bayntun, Media Relations Manager for Volvo, discussed Volvo's new owners and what Volvo hopes they will bring: "New ownership has brought independence, allowing us to move more quickly in the marketplace to meet customer needs, and introduce new technologies. With it has also come investment in next generation platforms and drivetrains, and new opportunities in the Chinese market - all of which will help us double global sales in the next decade."

In a way, Volvo's ownership has gone full circle, with seemingly as many twists and turns (yes, it's an odd circle) and ways to trade as it's possible to trade under. Over its 90 year history, Volvo's story begins in 1924, when ball bearing manufacturer SKF branched out into automobiles, producing the first Volvo in 1927. Initially simply a minor subsidiary of SKF, Volvo went on to branch into commercial vehicles, heavy machinery and even marine engines.

It took only a few years of trading for Volvo to become hugely successful. SKF's selloff of the Volvo Group happened in 1935, after the group was floated on the Stockholm stock exchange. From then until 2000 Volvo operated as an independent company with Volvo cars as its automotive subsidiary, and this period saw huge growth as the Gothenburg manufacturer went from strength to strength. 

(Left - SKF's headquarters in Gothenburg, courtesy of Mangan2002)

Above: the legendary P1800 was produced under an independent, and is one of the brand's most iconic cars. 

Never a mainstream carmaker, Volvo's state of independence saw through distinctive and successful models such as the Amazon, 200 Series and 850, marking a 'golden age' for Volvo. The Autumn of 1955 saw a particular milestone in Volvo's independent lifetime, as for the first time it began exporting cars to the USA. From here, Volvo's success skyrocketed, with particular success in 1986. After this, however, the advent of Japanese luxury marques saw Volvo's market share shrink as its competitors grew exponentially in number. 

From that moment on, Volvo's problems started. Facing a dramatic decline in sales after losing a hefty share of the market to the likes of Lexus, Volvo went into freefall. Eventually, in 1999 Volvo Group parted ways with Volvo Cars, selling to Ford for $6.45billion in 2000. Now sitting in Ford's Premier Automotive Group along with Aston Martin, Jaguar and Land Rover, Volvo started the 21st Century as part of an automotive giant, with its parts being shared across a range of Ford Motor Company products. 

Although the range of Volvo products grew under Ford, Volvo's future was unsteady. With mounting monetary troubles, Ford looked to Volvo to alleviate its worries. Hundreds of workers were laid off, sparking rumours that not just Volvo, but the entire Ford group were going under. Just ten years after Ford's acquisition of Volvo, it was sold to Geely Group Holdings Co. for just $1.5billion - almost a $4billion loss for Ford.

Above: the S80 was a marker of Volvo's move upmarket, a priority of Ford's management of Volvo.

Geely's groundbreaking buyout of Volvo was the turning point in Volvo's bumpy period, as after the captivity of Ford's stifling management, Geely allows Volvo to operate as if it were an independent company; retaining the brand's home of Gothenburg, as well as Swedish management. So toxic was the relationship between Volvo and Ford that Volvo aims by 2016 to be fully independent of Ford, not using a single Ford part in any of its lineup. Already gathering momentum and huge attention from economists and car fans alike, Geely's illustrious partnership with Volvo and its even more illustrious business plan, not only its stability but its expansion is as convincing as it is ambitious. To this day, Volvo, and by extension Geely, continues to make headlines across the motoring and economic media.

http://www.economist.com/news/business-and-finance/21615677-volvo

http://jalopnik.com/volvo-has-a-plan-to-bring-itself-back-from-the-nearly-d-1660747889

https://www.media.volvocars.com/global/en-gb/media/pressreleases/5072

http://www.drivesouth.co.nz/news/6633/volvo-serves-notice-to-1200-employees-in-sweden

http://usatoday30.usatoday.com/money/autos/2008-06-25-volvo-layoffs_N.htm

http://www.ibtimes.com/volvo-xc90-release-first-model-produced-under-chinese-ownership-will-be-revealed-next-week-1661410

http://www.forbes.com/sites/russellflannery/2014/10/27/geely-in-swedish/2/

Interview material: original content obtained via email interview with M. Bayntun

Volvo: a brief history

It's easy to overlook Volvo. That might sound unkind, but in the tumultuous recent automotive climate of niche-busting Audis, futuristic offerings from BMW and the demise of Volvo's Swedish rival Saab, it is undeniable. Be that as it may, Volvo's quiet competence should not go unnoticed.

Originally the subsidiary car-producing arm of Swedish ball bearing manufacturer SKF, April 14th 1927 is usually slated as Volvo's inception. The first ÖV 4 (or 'Jakob' to enthusiasts) rolled off the production line in Gothenburg on this date, and Sweden's second city still plays host to Volvo's headquarters today.

Above: A 1928 Volvo ÖV 4 'Jakob' Touring. Image: Lars-Göran Lindgren Sweden.

Within five years and one month of starting out, Volvo had sold more than 10,000 cars in 1932. The next five years also saw another 10,000 sales, however the coming wartime years all but put a stop to Volvo's car production, as the company "transformed its production to serve the armed forces".

Volvo's post-war period is where the manufacturer really came into its stride though. Not only did the PV444 and following PV544 give Volvo a convincing foot in the door of the lucrative American car market, the PV544 and Amazon led the way in road safety, being the first cars to feature three-point safety belts - which themselves were invented by Nils Bohlin.

Above: Volvo's grappling hook for the American market: the PV444. Image: Cropbot.

Volvo's safety drive didn't stop there though; in the interest of saving lives, Volvo let other manufacturers use their new three-point seatbelt technology in a move which has reputedly saved 'over one million lives'. This helped Volvo to cement its late-20th-century reputation as the go-to manufacturer for vehicle safety. Only recently has the rest of the automotive industry caught up, closing the gap between Volvo's remarkable safety standards and its key competitors.

But the latter part of the 20th century was Volvo's true golden age. The hugely successful 200 series sold nearly three million units during its marathon, 19-year production run between 1974 and 1993. As Volvo's best-selling car, it could be said that the 200 series is responsible for Volvo's rather staid image of rock-solid, safe and practical cars. But more of that later.

Above: The iconic 240, part of the world-beating 200 Series. Image: Vaa.

With a name which literally translates from Latin to 'I roll', it's clear that Volvo has gathered no moss, especially in the face of new, safer competition. Changing hands twice since the turn of the century of course took its toll on Volvo's credibility, with industry critics such as Autocar acknowledging this period as "a concerning time. But Volvo pulled through, and in the last few years has flourished under its new Chinese ownership, with models such as the XC90, gaining universal critical acclaim. This blog will later explore the highs, lows and every in-between of Volvo's across its 87-year history.

With such a rich history, it is blindingly obvious why Volvo has such a dedicated following. With their safety-first image, it's just as clear why they're still ever popular today, and with such an exciting future to boot, you can't deny that Volvo is a growing concern for the 'big three' in luxury carmaking. Volvo's Media Relations Manager, Martin Bayntun, compared Volvo's founding principles with those of today: "Assar Gabrielsson and Gustav Larson founded the Volvo Car Company in 1927 on the premise that: “Cars are driven by people. The guiding principle behind everything we make at Volvo, therefore, is and must remain, safety.” That philosophy is as true today as it was then. To that end then, our past as a manufacturer of safe vehicles continues to influence our cars today. A modern Volvo is a premium car with the very latest technology, desirable design, fuel efficient powertrains and pioneering safety equipment."

Above: The XC90, a successful exploration into new terrain for Volvo. Image: Volvo.

http://www.volvoclub.org.uk/history/milestones.shtml
http://www.volvoclub.org.uk/history/
http://www.volvoclub.org.uk/history/year_stats_search.php
http://www.volvocars.com/uk/top/about/values/pages/safety.aspx
http://www.autocar.co.uk/car-review/volvo/v40

Interview material: original content obtained via email interview with M. Bayntun