Volvo Chinpeggie: Taking the most difficult road is the easiest way to succeed
On July 25, the luxury car brand Volvo made another innovative move in the automotive industry.
This Nordic car brand, in conjunction with Xiaoguo Culture, created a mid-year “asking” event with a talk show as the core form of expression, summarizing its unforgettable first half of 2022 with bursts of laughter.
In fact, due to many unfavorable factors such as the epidemic, the performance of every auto company in the first half of this year was not satisfactory, especially for luxury brands, which fell sharper than the general trend. It is inevitable for Volvo to be in it, but fortunately, the decline in the first half of the year was relatively small, and it still maintained a stable market share. Moreover, during this period, the market share of Volvo XC90, S60 and other main models performed steadily, and all achieved positive year-on-year growth, with growth rates of 0.4% and 0.8% respectively.
The most gratifying thing is that in June, with the improvement of various conditions and the promotion of preferential purchase tax policies, Volvo’s performance rebounded strongly. Statistics show that the company’s sales in June increased by 73.9% month-on-month, much higher than the overall growth rate of 42% in the passenger car market. The monthly sales of 16,448 units also made it fifth among luxury brands in the luxury car segment. Such a strong trend of Volvo has undoubtedly enhanced the confidence of users, and it has also allowed the company to find its own sense of security in an uncertain external environment. And this perfectly echoes the talk show theme of Volvo’s mid-year “Ask” event: “In 2022, what is your sense of security?”
farewell lie win
Compared with other market segments in the automotive industry, luxury brands always give people an illusion, relying on their own brand advantages to put on a gleaming armor, as if nothing can hurt it, until the advent of the electric age, they It also seems to be losing the sense of security.
According to Qin Peiji, President of Volvo Cars Greater China Sales Company, consumer choices in this era have indeed changed the direction of the wind.
“If consumers want to buy a car worth more than 300,000 yuan in their shopping list, Mercedes-Benz, BMW, and Audi will definitely pop up in the era of fuel vehicles, and Volvo, Lexus, and Cadillac will be the second-tier ones. However, in the electric age, he must Will consider whether to buy Tesla, Xiaopeng, Weilai, Ideal.” Chin Peggy said at Volvo’s mid-year media communication meeting. The change Chinpeiji said is the transformation that traditional auto giants are undergoing in the Chinese market. The first half of the entire luxury market is not optimistic. Data show that the retail sales of the domestic luxury car market in the first half of the year were 1.265 million units, a year-on-year decrease of 14%, which was far greater than the decline rate of the overall auto market. For the time being, first-tier luxury can maintain its status as the Iron Triangle with a strong management system, but what about second-tier luxury? Tesla has already caught up to the front, and Volvo, which ranks fifth, is still chasing upstarts such as Ideal and Weilai.
It is undeniable that the supply chain problems caused by repeated epidemics and the shortage of chips have seriously affected the rhythm of luxury brands, but the market does not seem to buy it, and is even more inclined to think that luxury brands are self-sufficient in the first two years. The bitter fruit sown by the arrogance of “Electric”.
For those multinational giants who have never thought of developing in the Chinese market, they can leave as soon as they say, and leaving may be a relief, but for those giants who have identified the Chinese market, there is a very painful realization. , The era of lying and winning is over, and what remains is fighting or fighting.
As a brand that “loves independent thinking” among luxury brands, Volvo is one of the most rapid and firm transitions.
Among all the traditional luxury giants, Volvo took the lead in proposing to completely abandon fuel vehicles, and realized the electrification layout of all models in 2021. They learned all the new thinking from new forces to keep themselves from falling behind as much as possible, reformed channels, deployed supermarkets, and tried OTA upgrades for cars and machines, etc.
Therefore, we see that Volvo is the first among all luxury brands to open the direct sales model innovatively. During this process, dealers no longer face inventory pressure and transform into service providers. The original sales rebate is changed to service commission, and the service commission is usually not lower than the previous sales rebate. But these huge transformations can only be experienced while practicing. When consumers are becoming more and more fascinated by the novelty created by new forces, how to continue the brand value of “Volvo” in the electric age, and how to convince consumers to be willing? Paying for a certain brand premium has become a major issue for Volvo. Chin Peggy said bluntly that this challenge is “very, very big”.
For luxury brands, the luxury advantages built in the era of fuel vehicles by virtue of performance and workmanship materials are becoming insignificant in the electric era. After all, with the blessing of three electric technologies, it is not too difficult to create the ultimate performance. Luxury Construction is no longer so mysterious, who wouldn’t know how to stack materials?
Therefore, the new forces who have mastered these redefine luxury and challenge the premium ability of luxury brands in public. In front of the colorful luxury, the luxury of the traditional giants seems to be only traditional and conservative.
The value of Volvo
So, is brand premium ability really unimportant in the electric age?
There is a view that the auto market will eventually move towards a pan-brand era, which means that consumers will not value brands as much as before, but will pay more attention to product strength and cost performance. But it is clearly too early to draw conclusions. People still have expectations for the luxury giants. If the products launched by the luxury giants are sincere enough, consumers will still choose Mercedes-Benz, BMW, Audi, Lexus, and Volvo as their top choices. On this point, Chin Peiji also holds the same view. He believes that “the future era will still be an era of branding”, so they will still adhere to the brand concept of safety, health, and environmental protection, and stick to the foundation of safety.
In English, there are two words that are translated into Chinese with traditional meanings, but in fact they have different meanings. Traditional is actually a commendatory word in English, mainly talking about the inheritance of better experience. Conventional is used when talking about conservative and old-fashioned.
“But they are translated into Chinese as traditions, and people increasingly feel that traditions are bad. I think it needs to be reversed. You can’t say that Chinese traditions are not good, so is China’s 5,000-year civilization thrown away? ?We still have to look at this matter in two parts.” Qin Peiji analyzed, “I think some brand concepts may have been talked about for too long, and (some) clichés, but if you change it, the foundation of the brand will be gone.” .
“No matter how Chinese it is, I can’t change the brand equity. The reason why Volvo is Volvo is because we are a brand that respects people in 1995. This is the value of Volvo’s existence.”
Only love and life can not live up to
Because people are respected, this car brand has launched the slogan “Only Love and Life Cannot Live Up”, and this is also an important business policy that guides them to bring a sense of security to others.
Respect for life enables Volvo Cars to focus on areas such as driving safety, user health and environmental friendliness even in a difficult business environment, such as the City Safety urban safety system and the latest air purification technology “Advanced Air Purification ( Advanced Air Cleaner, AAC), although such huge efforts tend to hide behind the scenes, not as gimmicks as the products of new forces.
But in times of life and death crisis, you will understand more how important the sense of security emphasized by Volvo is.
In Volvo Cars’ unique membership organization for car owners——Volvo Miracle of Life Club, you can hear many stories of Volvo car owners who survived major car accidents, because the members of the club are all sacrificed for the protection of Volvo cars in major traffic accidents. Chinese consumers who survived.
Respecting people has also allowed this luxury car manufacturer to make a series of caring actions for users, dealer partners and employees. For customers, from pre-sales to after-sales, Volvo Cars provides users with caring services throughout the life cycle of the car. The 12 whole-hearted service commitments solve real needs based on actual pain points, and bring users a full range of car services from pre-sales to after-sales. The cycle luxury service experience allows users to leave more precious time for more important people.
Take the most popular “free car pick-up and delivery” service as an example. In the first half of 2022, more than 100,000 car owners have enjoyed this service, with a total mileage of more than 2.15 million kilometers. An increase of 88% over the same period in 2021.
Volvo is also the first in the industry to launch the “Parts Lifetime Warranty” service. Since its launch, it has saved 4,300 yuan for each car owner who has enjoyed this service; Scooter service; the “all-weather protection” service, which confirms Volvo’s safety background, has accumulated 58,000 accidents.
In addition, during the epidemic, Volvo also introduced customer care policies such as extended warranty period, extended warranty period, road rescue service, half price of air-conditioning in the epidemic recovery area, and preferential battery replacement in long-term closed areas, which are rare in the industry.
Similarly, in the most difficult period before, Volvo Cars lowered the sales assessment for dealers. At the same time, speed up the rebate settlement process and assist them in obtaining bank financial support to reduce the financial pressure on car dealers.
take the hardest way
There are some persistence and some vacillation. This may be the truest state of existence of traditional giants in the new era. Everyone is speeding up the transformation, and everyone understands that the Chinese market is a “specially unique” market completely different from Europe, but when the previous advantages become a burden, few brands can be as flexible as the new forces.
Volvo can only find its own way. Different from new forces, Volvo’s channel reform will be a state where dealers and direct sales models coexist. At the same time, Volvo believes that software will not become the only profit model in the future, and brand premiums will still be part of corporate profits. The pressure of transformation will not be gone, and Chin Peggy will release it with a smile, for example, he said, “Internal jokes are that we are a post-95 brand, because Volvo is a brand with a 95-year history.” The greater the number of years, the heavier the burden, but it also means a better ability to resist risks.
Facing the continuous turmoil in global trade, rising raw material prices and supply chain constraints and many other challenges, Volvo can still achieve a strong rebound in performance. Statistics show that in June, in the Chinese market, Volvo ranked fifth among luxury brands with sales of 16,448 vehicles. In the global market, Volvo achieved stable performance with a quarterly revenue of SEK 71.3 billion and a profit margin of 15.1%.
How to continue the glory of the past in the new era of China’s auto market? Everyone who loved Mercedes-Benz, BMW, Audi, Volvo, Lexus, and Cadillac in the era of fuel vehicles is waiting for that day.
“I don’t think we should be eager for quick success. We need to establish a stable system with a long-term perspective. We should go at our own pace in the product matrix, and we should not lose long-term benefits for short-term benefits,” Chin Peiji said.
It is still an answer that is not exciting at all. It may be difficult not to follow the trend, but to follow yourself, but this is the test that these luxury brands need to stand before dawn.
As Chinpeggie said in his five-minute talk show: “It’s the easiest way to succeed when you take the hardest path, because it’s the path least traveled by.”