Volvo Embraces its Unpretentious Customers in Plan to Regain Ground in US Luxury Market


Volvo owners always knew they were different from other consumers. Now, the brand is launching a new, integrated advertising campaign in the US that explicitly appeals to the non-materialistic, minimalist ethos which differentiates Volvo aficionados from buyers of other luxury and near-luxury brands.

In the process, Volvo brand stewards hope to finally begin turning around the sales of a franchise whose US results peaked a decade ago, when the company was owned by Ford, and have kept on sliding over the last few years as Ford lost interest and then, in 2010, sold Volvo to Geely, a large Chinese automaker, for $1.5 billion.

Volvo owners’ “interpretation of luxury is different but very real,” Tassos Panas, vice president of marketing and product planning for Volvo of North America, told brandchannel. “They’re more into life’s experiences, and more into a Scandinavian simple design [of vehicles] versus a lot of clutter. They are very much luxury customers and love luxury products, but they don’t feel a need to impress others.”[more]

Thus, the first new TV ads in the campaign by Arnold Worldwide of Boston, which are breaking this week on national cable networks, underscore these alleged differences. One spot, “Rearview,” juxtaposes a Volvo owner’s priorities to those of competitive luxury-car drivers.

In the ad, a woman at a stoplight in a Mercedes-Benz SUV is primping her highly put-together face in her rearview mirror, when a women pulls up alongside her in a Volvo XC60. The Volvo driver, pretty but less made-up, seems to not notice the Benz driver next to her. Instead, she looks in her own rearview mirror and crosses her eyes, making her two little kids in the backseat squeal with laughter. “Volvos aren’t for everyone,” the ad intones, “and we kinda like it that way.”

An outdoor effort is targeted in Volvo’s top markets, such as southern California, positioning the brand versus traditional-luxury competition—such as with the tag line, “Pretense is so past tense.” In Los Angeles, one outdoor sign, already erected, refers to the Volvo S60 as “100% real. Can’t say that about everything around here.”

Panas said that Volvo specifically is targeting BMW, Mercedes-Benz and Lexus in its campaign and is based on new research in which the brand asked consumers not why they bought Volvos but why they weren’t buying these other brands.

“The answers we got were about people not feeling comfortable in a BMW, that Mercedes-Benz was too ostentatioius, that ‘everybody in my neighborhood’ has a Lexus and I wanted to be different.”

Still, in the other major aspect of the campaign, Volvo is directly targeting yet another luxury brand, Audi. In its S60 Challenge, Volvo is working with its dealers to put the Volvo S60 directly against the Audi A4 in a test-drive promotion: If the consumer still decides to purchase an A4 after driving both, Volvo will cover the first month’s payment on the Audi.

“A4 is the highest cross-shopped vehicle with the S60, which is why we picked it,” Panas said. And while he agreed that Audi itself has made a point of positioning its brand as a “new luxury” alternative to the “old luxury” of BMW and Mercedes, he said, “We want our message of confidence to grow across the board. That bold statement and confidence sends a message to Audi owners and other competitive owners.”

For Volvo, “confidence” has been in short supply lately. US sales peaked in 2003 when Volvo had a handful of fresh models and was a centerpiece of Ford’s stable of luxury brands that also included Jaguar and Land Rover as well as Lincoln. But financial troubles leading to the Great Recession forced Ford to short-change new-product development at Volvo, and the company has still been gearing the new-product pipeline and marketing presence back up under Geely’s ownership.

As a result, Volvo’s share of the overall US market has dwindled to just 0.5 percent and, of the luxury segment, to just 6 to 7 percent. For the year through March, while the overall US market increased by 6 percent, Volvo sales have slipped by another 8 percent.

Right now, Volvo is relying on the relatively new sporty S60 and XC60 utility vehicle. Panas promised a 2015-model V60 wagon, all-new to the US, by early next year and a new version of the now-hoary XC90, a larger utility vehicle, in the first quarter of 2015. And as always in the auto industry, it’s “new sheetmetal” that really moves the sales needle.

In the meantime, Volvo has re-upped a deal with Costco for special pricing on Volvos for the warehouse club’s members. Panas is hopeful that the new marketing campaign will move the brand beyond its largely recent “tactical” advertising which, in part, reflected a paucity of new products and adjustments to Geely ownership, which now seems to have Volvo back on track.

“We came to the point where we feel the most important thing we can do for our business,” Panas explained, “is to re-communicate what the brand is all about.”


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