Volvo Builds Luxury Image in China with ‘Made-in-USA’ Branding

Volvo's XC90 luxury SUV. (Courtesy Photo)

Volvo’s XC90 luxury SUV. (Courtesy Photo)

Acquired by Chinese automaker Geely in 2010, Swedish marque Volvo has spent the last five years attempting to find its place in the cutthroat China market as it tries to move upmarket from its status as a maker of affordable suburban dad sedans.

Last week, the brand announced plans to build a factory in South Carolina, aimed not only at better tapping the U.S. market and buffering the brand from currency shifts, but also at reaching Chinese consumer demand for premium “made in USA”-branded autos.

Currently, Volvo’s beating heart in China is its Sichuan factory, which pumped out 50,000 vehicles last year and is expected to product around 80,000 in 2015. This year marks the first time Volvo will export sedans from China. According to The New York Times, Volvo plans to send 1,500-2,000 cars to the United States over the course of 2015, after years of delays.

According to Autoblog:

The entire American-bound allotment will consist of the S60L, a Chinese market special version that adds generous heaps of chrome trim and over three inches of rear legroom to the midsize sedan. (Given the traffic, the affordability of chauffeurs, and the status that being driven conveys, the Chinese have a higher rate of what they call “rear seat consumers” than anywhere else. The extra room is for them. But Americans like it too.) The lengthening is noticeable mainly for the way it complements the car’s tightly arched design, giving it a less tense and more complete profile. But the key aspect of this vehicle is that it will be the first fully federalized car to be imported to America from China.

Volvo has also indicated plans to send an additional two models to the United States in 2015, the Belgium-made S60 Cross Country and made-in-Sweden XC90 R-Design.

But Volvo’s export plans—and investment in South Carolina—aren’t just moves to increase sales in the United States.  As Autoblog notes, Volvo wants to be taken seriously as a luxury brand in China, and to do so, promoting the fact that its made-in-China cars are good enough for the developed U.S. market is PR gold. As Volvo attempts to move upscale, particularly in China, it must maintain its status as a more premium brand elsewhere, especially in the United States.

As SVP of Volvo Cars China, Lars Danielson, put it, “To be successful in China as a premium brand…you need to be recognized in China as a global premium brand. Affluent Chinese consumers travel a lot, and are very aware of what brands mean.”

 

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