BusinessWeek's Michael Frank Holds an "I-told-you-so-a-thon" for Saab and Volvo
Has BusinessWeek been reading TTAC? Writer Michael Frank's assessment of Saab and Volvo sounds extremely familiar… Frank places Saab's problems right where they belong, stating GM "hasn't let Saab do anything creative, let alone steer itself in any direction other than toward total irrelevancy, for a good decade." But what's wrong with Volvo? "[L]ike famously angst-ridden compatriot filmmaker Ingmar Bergman, Volvo fears sexy… its slammed and ultra-turboed R-edition cars… are, for all intents and purposes, neutered and dead [because] Volvo is worried about fuel economy." The biggest problem for both, though: they've lost their brand distinction. As we've pointed out, Volvo no longer holds the upper hand in safety. Turbocharging is no long a Saab distinction. He wants something new from both automakers but concludes, "Oh, right, neither Volvo nor Saab has a new story to tell. And until they do, neither carmaker will have much of a future." To which all we can add is "Amen."
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Kjc I think both Volvo and Saab had to be combined with bigger players. Given the costs to develop new cars and the economies of scale involved neither would have been viable as independent automakers. The global economy is a two way street. The Truck and Heavy equipment part of Volvo is still very much a Swedish company that has "borged" Mack Trucks. The current Mack lineup is almost entirely badge engineered Volvos.
It's not the fact that GM didn't allow Saab to be creative that's the problem for me... it's the fact that GM stopped Saab building good cars. They took a brand renown for building solid, well engineered cars that were great to drive and managed to convert it to a company knocking out bland under engineered cars.
Volvo's window for building a minivan passed at least 5 years ago - the Japanese competition has just gotten way too tough with the high-end Odyssey and Sienna trim levels, and the new DC vans have some nice features as well. The profit margin on vans has shrunk due to competition and unpopularity as they were edged out by SUV's, then CUV. Volvo's management had the foresight to go for the low-volume money with the XC90 well before the Ford acquisition. The MB R-class is currently in that market space and not doing well for many reasons besides those humungous rear doors, and it's built in the low cost USofA.