Driven a Geely Lately? Will China’s Image Impact Quality Perceptions of Volvo?
China’s Geely purchased Volvo from Ford which raises a significant perception issue. Can China manufacture a product for the West that equals or exceeds what consumers expect from Volvo today? Will “China” carry any negative perceptions that will limit potential?
Time will tell how long perception issues will cloud business growth. Volvo’s Swedish heritage carried with it unique quality attributes… quality, well-built, great in winter, safe, etc. Ford has been able to improve styling without losing these core attributes. So buyers continue to feel that a Volvo product is essentially Volvo. (Did you know that “Volvo” means “I roll”, derived from the Latin volvere?).
The acquisition by the Chinese begs the question whether Volvo cars and trucks will remain high quality and keep pace with competitors, or decline. Will the Chinese attempt to stretch the Volvo brand to also mean products for a much wider audience (think “people’s wagon”)? The chairman of Zhejiang Geely Holding Group has indicated he wants to “revive Volvo cars”, as well as capitalize on the enormous potential of the China market. While the stated intention is to keep separate the Volvo brand from the Geely brand, time will tell.
Just after WWII, Japan product quality had a very poor reputation. Cheap rip-offs of Western brands. But in 1946, the Occupation Forces mission was to revive and restructure Japan’s communications equipment industry. This “Quality Movement” had enormous impact on shifting the orientation from price (cheap) to quality and reliability. Today, Japan is a leading manufacturer of electronic appliances and communications equipment setting the pace for quality and innovation. China can do the same in cars as it has in other industries.
This will be a valuable exercise in evolving Western perceptions about Chinese products. My bet is they will continually deliver quality products and earn a strong entry in the automotive marketplace, globally. This will slowly reshape perceptions.
What do you think?