Posts tagged ‘Sweden’


Ikea tries to shut down its biggest fan site, showing us how the company thinks within

17.06.2014

In an age of social media, you would think it was the most stupid thing to try to shut down the biggest online community you have.
   Ikea has done just that, on IP grounds, against Ikea Hackers, by getting their legal department to send Jules Yap, its founder, a cease-and-desist letter after her site had been going for eight years. In that time she had sent customers to Ikea, after they were inspired by the new ideas her community had on doing new things with Ikea furniture.
   There are arguments that Ikea could have been liable for any injuries sustained from the “hacks”, but that’s daft. Are we really that litigious as a society, prepared to blame someone for something we ourselves freely chose to do? Ikea has instructions on how to build their furniture, and it’s your own choice if you are prepared to go against them.
   And eight years is an awfully long time to bring a case against someone for trade mark usage, rendering this claim particularly weak.
   There are other Ikea-hacking websites and Facebook pages as well—so it’s even dumber that Ikea would go after one with such a huge community, a website that has an Alexa ranking currently in the 20,000s (in lay terms: it has a huge audience, potentially bigger than that of Ikea’s corporate site itself in Jules’s country, Malaysia).
   Jules says that she has to take down the ads as part of her settlement for being able to retain the site—ads that simply paid for her hosting, which she might not be able to afford to do any more. (Some fans have offered to host for free or provide new domain names.)
   The Ikea Hackers logo doesn’t look remotely like the Ikea one, which would readily imply there was no endorsement by the Swedish company.
   Therefore, Ikea’s statement, on its Facebook, holds very little water.

Vi Àr glada för det engagemang som finns för IKEA och att det finns communities runt om i vÀrlden som Àlskar vÄra produkter lika mycket som vi gör.
   Vi kĂ€nner ett stort ansvar mot vĂ„ra kunder och att de alltid kan lita pĂ„ IKEA. Det Ă€r viktigt för oss att vĂ€rna om hur IKEA namnet och varumĂ€rket anvĂ€nds för att kunna behĂ„lla trovĂ€rdigheten i varumĂ€rket. Vi vill inte skapa förvirring för vĂ„ra kunder om nĂ€r IKEA stĂ„r bakom och nĂ€r vi inte gör det. NĂ€r andra företag anvĂ€nder IKEA namnet i kommersiellt syfte, skapar det förvirring och rĂ€ttigheter gĂ„r förlorade.
   DĂ€rför har Inter IKEA Systems, som Ă€ger rĂ€ttigheterna till IKEA varumĂ€rket, kommit överens med IKEA Hackers om att siten frĂ„n slutet av juni 2014 fortsĂ€tter som en fan-baserad blog utan kommersiella inslag.

Essentially, it uses the standard arguments of confusion, safeguarding its trade mark, and—the Google translation follows—‘When other companies use the IKEA name for commercial purposes, it creates confusion and rights are lost.’
   This can be fought, but Jules elected not to, and her lawyer advised against it. It’s a pity, because I don’t think she received the best advice.
   On Ikea’s Swedish Facebook page, some are on the attack. I wrote:

I would hardly call her activity ‘commercial’ in that the ads merely paid for her web hosting. I doubt very much Jules profited. But I will tell you who did: Ikea. She introduced customers to you.
   While your actions are not unprecedented, it seems to fly in the face of how one builds the social aspects of a modern brand.
   The negative PR you have received from this far outweighs the brand equity she had helped you build. It was a short-sighted decision on the part of your legal department and has sullied the Ikea brand in my mind.

   This won’t blow over. It’s not like politics where people are disinterested enough for all but the most impassioned to retain memory of a misdeed. (For example, does Oravida still mean anything to anyone out there?) Ikea is a strong brand, and mud sticks to them. Some years ago, I met a woman who still had a NestlĂ© boycott in place after the company’s milk powder incidents of the 1960s. And all of a sudden, Ikea’s alleged tax fraud (see here for the SVT article, in Swedish) or the airbrushing of women out of its Saudi Arabian catalogue come to mind. They’re things most people forget, because they go against the generally positive image of an organization or Ingvar Kamprad himself, until there’s some misstep from within that shows that things are rotten in Denmark—or in Sweden, as the case is here. Or is it the Netherlands, where its company registration is?
   Brands are, in particular, fragile. I have maintained for over a decade that brand management is increasingly in the hands of the audience, not the company behind it—something underpinning my most recent academic paper for the Journal of Digital & Social Media Marketing. We all know that there must be as much consistency between the views of the brand held by the organization and those held by the public. The greater the chasm, the weaker the brand equity. Here, Ikea is confirming the worst of its behaviour done in the name of its brand, all for the sake of some euros (I won’t say kronor here)—meaning the consistent messages are not in clever Swedish design, but between what it’s doing in this case and what it allegedly does in Liechtenstein.
   And since the foundation that controls Ikea is technically not for profit, then it’s a bit rich for this company—accused of tax avoidance by calling itself a charity—to be calling Jules’s activities ‘commercial’. It is hypocritical, especially when you bear this in mind:

In 2004, the last year that the INGKA Holding group filed accounts, the company reported profits of €1.4 billion on sales of €12.8 billion, a margin of nearly 11 percent. Because INGKA Holding is owned by the nonprofit INGKA Foundation, none of this profit is taxed. The foundation’s nonprofit status also means that the Kamprad family cannot reap these profits directly, but the Kamprads do collect a portion of IKEA sales profits through the franchising relationship between INGKA Holding and Inter IKEA Systems.

   The tax haven secret trust the companies use is legal, says Ikea, which is why it pays 3·5 per cent tax. I have little doubt that the complex structure takes advantage of laws without breaking them, and Kamprad was famous for departing Sweden for Switzerland because of his home country’s high taxes. The cease-and-desist letter probably is legal, too. And they show you what mentality must exist within the organization: forget the Swedishness and the charitable aspects, it’s all about the euros.

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Posted in branding, business, culture, internet, marketing, Sweden | No Comments »


Monica Z now out on DVD and Blu-ray

18.01.2014

Monica Z, the bio-pic about the late Swedish jazz singer starring Edda Magnason, is now out on Blu-ray and DVD, as of earlier this week.
   I learned about the movie not through my Swedish contacts—they were messaging me only when the film was in the cinemas—but when Edda appeared at AllsĂ„ng pĂ„ Skansen in 2013 singing ‘Gröna smĂ„ Ă€pplen’ with a Monica Zetterlund hairstyle and 1960s dress. It didn’t take long to do a bit of surfing after discovering this:

   Purists (like me) will say she’s not quite as good as Monica but of the covers, this is still really good. I listened to the soundtrack ad nauseam on Myspace (really) but if I return to Scandinavia in 2014, I might pick up the DVD in person.
   Just to make this post more complete, and for all lovers of Swedish jazz, here’s my favourite Monica number, as performed by Edda. I had only seen this on the full AllsĂ„ng telecast prior. (You need to have a break in the midst of a political campaign.)

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Posted in culture, interests, Sweden, TV | No Comments »


A farewell to Sir Paul Callaghan, and the next step for our innovators

24.03.2012

When I attended Sir Paul Callaghan’s talk at the Wellington Town Hall last September, I felt vindicated. Here was a man who was much better qualified than me to talk about economic development, effectively endorsing the policies I ran on in 2010. But not being political, he was a great deal more persuasive. Since then, I’ve noticed more New Zealanders become convinced by Sir Paul’s passion—and wake us up to the potential that we have in this nation.
   This great communicator, this wonderful patriot, this sharpest of minds, passed away today after a battle with colon cancer.
   I wrote on Facebook when I heard the news that the best thing we can do to honour Sir Paul was to carry on his legacy, and to carry out the dream he had for making New Zealand a better, more innovative nation.
   Sir Paul wasn’t afraid of tall poppies. He knew Kiwis punched above their weight, and wanted to see more of that happen.
   All those tributes today saying his passing is a great loss to the nation are so very accurate—and I hope we’ll continue to see his dream realized.

Sir Paul Callaghan had a vision, but at the more micro level, it’s important to get a grasp on what the market will bear. There is a fine line, of course, between testing a market and relying too much on a rear-view mirror, and Jenny DouchĂ©’s new book, Fool Proof, addresses that, with case studies featuring some very successful New Zealand businesses, including No. 8 Ventures, Phil & Ted’s, Cultureflow and Xero. She stresses dialogue and engagement as useful tools in market validation, and she’s so passionate about the importance of her work that she’s donated copies to 200 organizations, including business incubators, economic development agencies, business schools and chambers of commerce nationally. Find out more at foolproofbook.com.

A Reuter story today talks about Sweden’s growing inequality in the last 15 years—something I’ve certainly noticed first-hand in the eight-year period between 2002 and 2010.
   We often aspire to be like Sweden, but much of that aspiration was based on a nation image of equality and social stability. Certainly since the mid-2000s, that hasn’t been true, as Sweden embarked on reforms that we had done in the 1980s, with selling state assets and cutting taxes.
   Inequality, according to the think-tank quoted in the article, has risen at a rate four times greater than that of the US.
   The other sobering statistic that came out earlier this year was that Sweden has the worst-performing economy in Scandinavia.
   None of this is particularly aspirational any more, and perhaps it brings me back to the opening of this blog entry: Sir Paul Callaghan.
   Given that we had the 1980s’ economic reforms, but we have scarcely seen the level playing-field promised us by the Labour government of that era, our best hope is to innovate in order to create high-value jobs. On that Sir Paul and I were in accord. Let’s play in those niches and beat the establishment with smart, clever New Zealand-owned businesses—and steadily achieve that that level playing field that we’re meant to have.
   It’s about cities creating environments that foster innovation and understand the climate needed for it to grow, which includes formally recognizing clusters, identifying and funding them, and having mechanisms that can ensure ideas don’t get lost beyond a mere discussion stage—including incubator and educational programmes. The best ideas need to be grown and taken to a global level.
   Ah, I hear, many of these agencies already exist—and that’s great. Now for the next step.
   It’s also about cities not letting politics get in their way and understanding that the growth of a region is healthy—which means cooperation between civic leaders and an ability to move rapidly, seizing innovation opportunities. It means a reduction in bureaucracy and the realization that much of the technology exists so that time spent on admin can be kept to a minimum (and plenty of case studies exist in states more advanced than us). Right-brained people thrive when they create, not when they are filling in forms. The streamlining of the Igovt websites by the New Zealand Government is move in the right direction.
   We know what has to be done—especially given how far down we are based on the following graph from the New Zealand Institute:

   As the Institute points out, many of the right moves are being made, and have been made, at the national level. But it is also aware that an internationalization strategy is part of the mix—the very sort of policy I have lived by in my own businesses. And this begs the question of why there have not been policies that help those who desire to go global and commercialize their ideas at a greater level. That’s the one area where we need to champion those Kiwis who have made it—Massey’s Hall of Fame dinners over the last two years celebrate such New Zealanders in a small way—and to let those who are at school now know that, when they get into the workforce, that it’s OK to think globally.
   If we’re wondering where the gap is, especially in a nation of very clever thinkers, it’s right there: we need to create a means for the best to go global, and make use of our million-strong diaspora, in very high positions, that Sir Paul pointed out in his address. Engagement with those who have made it, and having internationalization experts in our agencies who can call on their own entrepreneurial experiences, would be a perfect start.

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Posted in business, leadership, marketing, New Zealand, politics, publishing, Sweden, technology, Wellington | No Comments »


Stefan Engeseth’s next book, Sharkonomics: in business, what can we learn from sharks and their survival?

22.02.2012

When I talked about Nicholas Ind’s book, Meaning at Work, a few weeks ago, I said there were two titles that I wanted to mention.
   The second is by my friend Stefan Engeseth, who has followed up some very innovative titles—Detective Marketing, One and The Fall of PR and the Rise of Advertising—with Sharkonomics.
   The premise is simple: how have sharks survived millions of years, and can we learn any lessons from them for business?
   I’ve been involved with Sharkonomics since Stefan pitched the idea, and I’ve had word of him heading down to South Africa to dive with the beasts.
   I’ve dived with them, too, many years ago, except mine weren’t as treacherous as the ones he confronted.
   A few of us, in endorsing his book, couldn’t help but use a bunch of shark puns. Don’t let them put you off.
   He wants to get further word out and the first 100 people to do so will get the book for free (details here). You can read a brief summary about it here. It’s published by Marshall Cavendish, the people who published One. Also head to Sharkonomics’ Facebook page—there’ll be more information on the upcoming launches and some of the great ideas Stefan has planned for them.

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Posted in business, marketing, Sweden | 3 Comments »


Endgame: Saab ïŹles for bankruptcy

19.12.2011

If you’re a car nut, then you won’t be mourning, too much, the passing of former Czech president Vaclev HĂĄvel. Or, for that matter, Kim Jong Il. It’s Saab that has finally died as it files for bankruptcy after GM, which still licenses key technologies to the Swedish firm, vetoed its sale to Zhejiang Youngman Lotus Automobile.
   GM has a JV with SAIC, the Shanghai automaker, and believes that if those technologies were to find their way into the hands of a small upstart Chinese rival, it wouldn’t be to its advantage. Saab, which had been teetering on collapse since March, when it first stopped production, decided to call in the receivers today.
   GM had issued a statement at the weekend, saying, ‘Saab’s various new alternative proposals are not meaningfully different from what was originally proposed to General Motors and rejected 
 Each proposal results either directly or indirectly in the transfer of control and/or ownership of the company in a manner that would be detrimental to GM and it shareholders. As such, GM cannot support any of these proposed alternatives.’
   Swedish Automobile, the parent company of Saab, responded, ‘After having received the recent position of GM on the contemplated transaction with Saab Automobile, Youngman informed Saab Automobile that the funding to continue and complete the reorganization of Saab Automobile could not be concluded.
   â€˜The Board of Saab Automobile subsequently decided that the company without further funding will be insolvent and that filing bankruptcy is in the best interests of its creditors.’
   GM, in the two decades in which it owned Saab, failed to turn a profit with the brand. However, its parting gift, the new 9-5 saloon, was heralded by some fans as a return to form for the company. Hopes were high for it, and the 9-4X crossover, helping Saab back into a position of strength.
   It’s easy to do a post mortem now, but the failure could be levelled at GM’s misunderstanding of the Saab brand. It may have been sensible to shift Saab models on to Opel platforms for economies of scale, but, in doing so, the cars lost some of their character. The lowest point was when GM created a rebodied Subaru Impreza and called it the Saab 9-2X, which fooled few buyers—one has to remember that Saab buyers tended to be well educated. Saab never fitted well in a business which targeted the mainstream: its own cars were always bought by people who enjoyed their quirkiness and the fact they did not follow convention.
   GM only understood this when it was far too late, as the last two models demonstrated.
   When GM itself had to file for bankruptcy protection in the US in the late 2000s, Saab, Pontiac, and Saturn were the victims.
   When Saab was sold to Spyker, its boss Victor Muller invested heavily into the business to try to turn it around—but he, and other investors, would have lost tremendously today. Saab fans will likely remember Muller favourably—after all, he put his own money into the business and shared his supporters’ passion—but in a world where break-even points are at hundreds of thousands of units, Saab’s 30,000 in 2010 were never going to be enough. MG Rover Ltd. collapsed with 2004 sales of 115,000 in 2005.
   As hindsight is 20-20, Saab and Youngman might be accused of wishful thinking, believing it to be unencumbered by GM’s IP rights. However, the American business held the right of revocation over key licences that make up Saab’s 9-3, 9-4X and 9-5 models.
   It’s not the first time intellectual property has got in the way of car businesses. One of the most famous examples was BMW arranging with Rolls-Royce trade mark owner Vickers plc to license the brand for motor cars, as Volkswagen negotiated to buy the Rolls-Royce Motors business. And all Volkswagen really had to do to find this out was visit the Rolls-Royce website home page at the time: right at the bottom, stated clearly, was the message that the Rolls-Royce brand was licensed from Vickers plc.

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Posted in branding, business, cars, China, design, marketing, Sweden, USA | 3 Comments »


Panos Emporio: dare to be human

10.10.2011

Panos Emporio

We weren’t responsible for the layout or photography, but our contribution here is in the tagline, ‘Dare to be human’.
   In my 12-year friendship with Panos Papadopoulos, the designer behind Swedish swimwear (and now clothing) label Panos Emporio, we’ve often worked on marketing tasks. The most recent one: come up with a tagline that encompasses the Panos Emporio brand.
   The term ‘Dare to be human’ has emerged elsewhere (as I discovered after coming up with it), though to my knowledge not in this industry or as a tagline, and since the campaign is largely focused on Scandinavia, it doesn’t appear to have any conflict.
   The story is fairly simple: mixing the vision of the head of the company with the accurate external perceptions, and coming up with something that all audiences can agree on.
   We had done some exploratory work on the philosophy of Panos Emporio earlier in the year and this was an extension of that.
   Our brand research has usually shown that an accurate tagline is more effective, in communicating a brand internally and externally, than any mission statement, and one that can serve a company in the long term is better still.
   Panos’s thoughts were that he liked to push the envelope when it came to his swimwear designs—that much is a given, and accepted by his customers—and his use of PR in Sweden over the years suggested as much. Where we align even more is our shared belief in humanitarianism, and the idea that good people can become anything they wish, and should have the opportunity to do so. Over the years we’ve discussed some great programmes that can help young people, and trying to cement these ideas, and many other ideas of things we’d like to do to advance our planet. If you look back across the 25 years of the label, Panos Emporio was often pioneering in its designs and publicity programmes, often shocking the sector, and earning Panos a celebrity status (including an episode of the Swedish version of Secret Millionaire).
   External audiences will always come back to us to tell us the comfort in Panos’s designs first, followed by their appreciation of the designs themselves, so there was an intersection with the “human” aspect here. It was taking that with humanitarianism and social responsibility, and blending it with the envelope-pushing.
   â€˜Dare to be different’ is trite, so it really was down to changing the last word. (I am simplifying the process because there were many others that were rejected.) It tested well, and the first ad with the new tagline will break this quarter.
   I hope it’ll stay with the firm for many years to come. I think it encompasses everything Panos tries to say with his work.

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Posted in branding, business, marketing, New Zealand, social responsibility, Sweden | No Comments »


Saab to get €245 million if Pang Da and Youngman deal approved

04.07.2011

Today, from Saab:

Swedish Automobile N.V. (SWAN) and Saab Automobile AB (Saab Automobile) today announced the signing of final agreements with Pang Da Automobile Trade Co., Ltd. (Pang Da) and Zhejiang Youngman Lotus Automobile Co., Ltd. (Youngman), thereby converting the non-binding memorandum of understanding relating to the equity investment of Pang Da and Youngman 


The amount of the investment is €245 million, which amounts to this, according to Saab (some proofreading changes by me):

The agreements allow for the return of Mr Vladimir Antonov as a shareholder–financier of SWAN and Saab Automobile which the parties expect as soon as the parties at interest have cleared him. The NPJV will be 50 per cent owned by Saab Automobile and 50 per cent by Youngman Passenger Car, and forms the foundation for an expansion of the Saab product portfolio with three models which, until now, did not form part of Saab Automobile’s current and future product portfolio. As such the NPJV will focus on developing three completely new Saab vehicles: the Saab 9-1, Saab 9-6X and Saab 9-7.

   No doubt there will be existing technology in the three cars, and they should go down terrifically in China. And if it all goes well, this means that Saab won’t follow MG Rover down the gurgler, despite having been unable to pay wages a few weeks ago.
   But €245 million isn’t that much in today’s world, especially since Saab can’t be breaking even at its present capacity.
   I don’t want to see Saab disappear. It may have been the choice of TV villains (Leslie Grantham in both The Paradise Club and 99–1 comes to mind) as well as one or two real-life ones I can think of, but it’s a storied brand and it’s made good cars over the years. And a mate of mine has a 900, too.
   Sweden hasn’t spent all these years bagging the brand, either—it was effectively stripped of its Saab-ness while under General Motors.
   Let’s hope the company can get things right with the Chinese equity stake, which hopefully will provide more confidence. It’ll open up distribution in China, providing the government agencies agree, where a foreign brand like Saab would go down immensely well, and just at the right time. Good timing was not something that MG Rover was blessed with, regardless of the actions of the Phoenix Four.
   The discerning Chinese buyer is emerging on the mainland, and they don’t necessarily want the flash of the Mercedes-Benz. A more subtle brand might work there, and Saab actually fits the bill.
   The 9-7, I assume, is a large car, and Youngman’s Pang Qingnian hints that not only will China get this model, but the US as well.
   Good luck to the parties on this one—here’s hoping the worst is over.

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Posted in branding, business, cars, China, culture, design, marketing, Sweden | No Comments »


Why do the major parties insist on holding us back?

04.07.2011

In 2002, I did something really stupid. I bought a brand-new, 750 Mbyte Zip drive.
   After all, I had had three years of use out of my 100 Mbyte one, and since 750s looked like the way of the future, I had one installed.
   I can still count the number of times I used it on one hand, because CD-ROMs became common currency and replaced the Zips.
   So when I see we’re building more roads, it reminds me of the Zip drive. Investing in a 20th-century technology in the 21st century.
   When, in fact, we can grow a city and a country more effectively by ensuring its technology is up to speed with the rest of the world.
   If we’re going to attract the best and brightest minds to our shores—and many of them are in the IT world, and software is a frictionless export that overcomes the tyranny of distance—we need to have an infrastructure that isn’t stuck in the previous century, either.
   A forward-looking technological investment for better internet speeds or a real wifi network is better value—and potentially generates more jobs for this nation.
   Which makes me wonder just how clued up the major parties are in this year’s General Election.
   The disappointment I’ve seen in business-damaging legislation, from the Copyright Act to what potentially exists in the TPPA, suggests that neither major party understands what it takes to grow business sustainably in this nation.
   And now to see a sudden change of heart from certain members of the government and the Opposition when the UN has published a report calling internet disconnection a violation of human rights shows they never understood the law in the first place.
   From Ars Technica (emphasis added):

Michael Geist notes that on Friday, Sweden made remarks at the UN Human Rights Council that endorsed many of the report’s findings, including the criticism of “three strikes” rules. The statement was signed by 40 other nations, including the United States and Canada. The United Kingdom and France, two nations that have enacted “three strikes” regimes, did not sign the statement.
   â€œAll users should have greatest possible access to Internet-based content, applications and services,” the statement said, adding that “cutting off users from access to the Internet is generally not a proportionate sanction.” It also called network neutrality and Internet openness “important objectives.”
   Interestingly, the report is signed by New Zealand, which enacted legislation in April that sets up a special Copyright Tribunal for expediting file-sharing cases. The penalties available to the New Zealand government include Internet disconnections of up to six months.

   That’s pretty worrying, when lawmakers don’t understand law. Would you have a mechanic who didn’t understand the mechanics of your car? A dentist who didn’t understand teeth? Or, for that matter, political party leaders whose opinion of their nation is so low that they might consider locking their nation in to backward industries?
   That doesn’t sound like understanding New Zealand, and its ingenuity and pride, to me.
   At least I learned from my Zip drive moment. You do when you spend your own money, outside the political world.

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Posted in business, internet, leadership, New Zealand, politics, Sweden, technology, Wellington | 4 Comments »


Stefan Engeseth hits 1,000 posts on Detective Marketing blog

21.04.2011

Stefan Engeseth and Jack Yan
Martin Lindeskog

Congratulations to my good friend Stefan Engeseth on reaching 1,000 posts on his blog today!
   It’s even more of a milestone when you realize Stefan is not blogging in his native tongue. Add to that the fact that he suffers from dyslexia.
   But we follow his blog because we admire several qualities about him: his willingness to examine new ideas; his open-mindedness; and his love of learning, and sharing that knowledge with us all.
   You can add one more in my case: because he’s one of my closest friends and one of the most decent and generous human beings I have ever met.

Happy Easter, everyone!

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Posted in branding, business, internet, leadership, marketing, publishing, Sweden | 4 Comments »


Volvo unveils its China strategy

26.02.2011

Volvo press conference

Volvo has announced that it will build a plant in China, and seeks approval for a second, in what it calls its second home market.
   It was inevitable, though for the long-term survival of the brand, it’s not a bad idea.
   Through Geely’s acquisition, it can potentially leapfrog other foreign car brands inside China by having more than a domestic partner: a domestic owner.
   There won’t be much toing and froing as Geely can call the shots with Communist Party authorities.
   The company already has a technology centre in Shanghai to deal with design, purchasing and manufacturing decisions.
   The new Chengdu plant, says Volvo, will only build Volvo cars—there will be no Geelys going through there.
   Volvo also says it will not affect jobs in Europe, which can be believed at this stage: the plant should be sufficient to deal with growth in China and the eastern hemisphere, where Volvo could be a lot stronger.
   While Volvophiles won’t be upset about most of the developments above, there will be one that will concern them.
   The company says that Volvo Car China’s new-product development will be done in Shanghai, not Göteborg. Göteborg will take the lead on hybrid and electric cars globally.
   Given the volumes involved—Volvo is targeting 200,000 cars per annum by 2015 in China—I’m not sure if it means that China will get its own range of cars. The likely scenario is that there will be a single, global range at these numbers.
   So how will the balance of global Volvo NPD be shared between Göteborg and Shanghai?
   Volvo suggests that HQ remains in Sweden on one hand, but, according to Freeman Shen, senior vice-president and chairman of Volvo Cars China Operations, says, ‘The Volvo Car China Technology Centre in Shanghai will develop into a complete product development organization on an international level. It will have the competence and capacity to work together with the HQ in Sweden, participating in Volvo Car Corporation’s work process for developing entirely new models,’ says Freeman Shen.
   I’m not criticizing Geely’s competences because if you look at its latest models, the company has certainly come a long way. Chinese designers, if nothing else, are fast learners, and knock-offs are becoming things of the past if 2010’s new models are anything to go by.
   And as a Swede is heading over to China to help set up the plant, one envisages that similar training in the Volvo design and creative process will be in the offing.
   Otherwise, there won’t be much separating Volvos from other car lines with the exception of a grille with a diagonal bar.
   But the press conference still leaves questions unanswered about how the NPD process will work.
   Nevertheless, allowing Volvo to pursue innovation is good news. Ford permitted it to happen but so much platform development was done elsewhere. Volvo remained in charge of global safety for Ford models, and gave the old S80 platform to a variety of cars, including the current and previous Taurus.
   The difference is, the parent company’s platforms weren’t half bad to begin with. I’m not so sure about Geely’s.
   I do, however, like the idea of an innovative, world-first Volvo that can get its new developments in safety and alternative energies out to the market before the competition. No more will the firsts be moderated by Dearborn.
   Innovation has not deserted the company—it has announced a V60 diesel plug-in hybrid—but we will not know what the new Volvo will look like till a model, with no Ford heritage, surfaces in a few years. That will be an interesting development.
   Geely chairman Li Shufu says, ‘We continue to uphold our principle that Geely is Geely and Volvo is Volvo. A more globalized, more focused luxury brand will turn our vision of a growing and profitable Volvo Car Corporation into reality. The company will continue to contribute to the development of the global automotive industry by introducing world-first innovations that make an outstanding brand win in the market-place.’

That doesn’t really settle it though.
   I have some concerns with Mr Li’s market positioning, because there are Swedes, indeed many Europeans, who don’t see Volvo as a luxury brand.
   Thanks to Ford, Volvo was edged upmarket to avoid competition with its own models—but it means its market share at home has been severely reduced.
   Earlier this century, most Swedish taxicabs were Volvos—today Mercedes-Benz and Toyota serve a proportion of the local market as Volvo could not offer the smaller models it once did.
   And if its home market share continues to decline, never mind how China goes: Volvo will be increasingly inaccessible to first-time car buyers in Sweden. Its need, then, to retain brand values might be weakened.
   Speaking hypothetically, if these world-first innovations are created merely for luxury models, then how long will they take to get to the everyday market?
   I remember an era when Volvo didn’t skimp on safety and innovations for even its lowliest models. And Volvo-as-luxury seems to fly in the face of that.
   The reality is, if Volvo is going to find more volume in the orient, then the luxury positioning will be more dominant.
   It’s going to be easy to foresee Volvos going all over the east from the Chinese plant, to allow for greater profits. Renault and Peugeot are sourcing from plants in Korea and Malaysia to serve the eastern hemisphere, and as far afield as eastern Europe, at more reasonable prices. It would not be a bad idea for Volvo to follow suit: it’s not in the hallowed realms of BMW, and its pricing needs to reflect that.

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