Chinese Consumers Driving Global Auto Trends

Volvo thinks outside the box. The recent Geneva Motor Show seemed to be more focussed on the Chinese market than the host region...

Volvo thinks outside the box.

The recent Geneva Motor Show seemed to be more focussed on the Chinese market than the host region Europe. Of course there is a good reason for this - China is seen as one of the last great marketing opportunities for brands that want to be considered truly global. China has a youngish population, a growing and increasingly affluent middle class and what can only be viewed as an insatiable appetite for brands and luxury engineering.

The market in China is still considered unsaturated, unlike the US of A and Europeland, so there is the potential for future growth which has led to the more established brands attacking the market with gusto. For years the Chinese market was afforded a level of protectionism by the central government, so an indigenous industry could develop and hopefully compete with the offerings from the west. Many of these ‘protected companies’ are in effect state-owned, but this has not stopped them from thriving in an increasingly competitive home market and securing their own share.

To compete in their home market, Chinese companies have employed a cocktail of joint ventures and acquisitions to enable them to take a crash course in auto manufacturing. One such company that has been taken over was Volvo, which was bought by Geely in 2010. The Swedish marque had suffered for a number of years under Ford’s stewardship, much like Jaguar Land Rover did in the UK before Tata from India took over there.

Volvo's Concept Estate car during the Geneva Motor Show
Since the takeover by Geely, the fortunes of Volvo have changed dramatically, according to Chief Executive, Hakan Samuelsson. “It’s made a huge difference. Number one, they have offered us stability. It’s never good for a company to be constantly in the newspapers with speculation about who will buy you or whatever. Now we have stable ownership and we can concentrate on our investment programme building the new Volvo,” he said in a recent interview at the Geneva Motor Show.

Samuelsson admitted there has been tension and a clash of styles with the new Chinese bosses over just how far the traditionally understated Scandinavian styling should be modified to meet the expectations of the nouveau riche in China, who prefer a bit more bling with their luxury brand.

"You can't just reinvent the brand in China and deliver something new - you would not be authentic," says Samuelsson. So we will deliver exactly what customers will expect from us, such as world-leading safety, world-leading environmental performance - but we will be making the brand a bit more exciting, especially for younger buyers."

At the same time, Samuelsson recognised that a key part of the market in China is for cars with a chauffeur. He added, “Of course, in China there is a lot of demand for big executive sedans, which have to have a very different feel and look to a Scandinavian family car. If you want to be competitive with a big sedan in China, you have to design it for rear seat owners - the owner doesn't drive the car, he's sitting in the back, and you have to give him the luxury he expects. This is a bit new for us, a challenge."



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