The author | Harry Zhang
After leading Volvo to a successful listing on the Stockholm Stock Exchange, a subsidiary of the NASDAQ Group, The current head of Volvo, Hakan Samuelsson, is about to retire. His successor, Jim Rowan, will become Volvo Cars' global CEO and president starting March 21, 2022. At present, the global automotive industry is at a crossroads of technological change, all kinds of competition is unprecedented, where volvo's century-old brand will eventually go, Rowan's various understanding of smart electric vehicles will play a decisive role.
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Hakan's ten years have been successful but also have regrets
In the past decade, Volvo has completely emerged from the quagmire of the 2008 financial crisis. Models of spa and CMA platforms that were previously heavily invested in have become the backbone of Volvo's sales volume, contributing considerable profits. Without the sudden outbreak and the impact of the lack of core, Volvo should be able to reach The target of 800,000 annual sales set by Hakan. And through the establishment of factories in China and the United States, Volvo has gradually entered an international brand from the previous Nordic car companies.
But in The Decade of Hakan, Volvo also has many regrets. In 2018, because of the valuation problem, there was no agreement with shareholders and finally missed the listing opportunity, so that Volvo could not vigorously develop electric vehicles through capital market financing, which is actually a biggest regret. In fact, Volvo's valuation has not grown by leaps and bounds, but the period of strategic opportunity has been missed. At present, Volvo only has XC40 and C40 two pure electric vehicle models with oil to electricity. Whether in terms of mileage or intelligent networking, there is still a big gap compared with new power brands such as Tesla and Wei Xiaoli. Neither Volvo itself nor Polestar, which was independent of Volvo, has actually made much progress in electric vehicles. Volvo now pins all its hopes on the soon-to-be-replaced SPA 2 platform.
The second regret is that Volvo did not seize the opportunity of the rapid development of the domestic luxury brand market, and was widened by competitors such as the BBA, and even now it has been surpassed by Cadillac and Lexus. In the end, this is due to the thinness of Volvo's model matrix, and one of the pillars of Volvo's current model, the Wagon series wagon, is destined to be a niche market in the Chinese market. Although several main models sell well, they will naturally be at a disadvantage in the competition with the BBA whose brand appeal and technical strength are not lost to themselves.
Can cars be turned into "FMCG"?
Volvo's new CEO, Jim Rowan, is most talked about by outsiders for his long tenure as DYSON's CEO. This is also the best opportunity for Volvo's board of directors to bring a revolution to this traditional luxury brand car company.
During his time at the helm of Dyson, Dyson's company's operating income ushered in significant growth, and the brand appeal continued to increase. Especially for domestic consumers, we are also gradually rising up for Dyson. Dyson's vacuum cleaner is no longer a household appliance as we traditionally understand it, and it has even been turned into an Internet celebrity FMCG. Whether it is a relatively wealthy middle class, or many young people who have just entered the workplace, when purchasing electrical products such as vacuum cleaners or air purifiers, they will regard Dyson as a brand with higher positioning and are willing to pay a relatively high brand premium. Theoretically, Tesla's positioning and nature in China are very close to Dyson at that time, and they are high-quality Internet celebrity products in the minds of the Chinese people. Tesla's gross profit margin of more than 30%, far ahead of many luxury car companies. So if Rowan can graft Dyson's play on Volvo and reverse Volvo's positioning and brand, it will be the most popular situation for Volvo's board. However, the car and the Dyson vacuum cleaner are still very different, both in terms of price and product attributes are not on an order of magnitude, so this transformation is doomed to be not easy for Rowan and the entire Volvo team.
At the helm of Volvo, Rowan was not at ease
For Volvo's trusted leaders, the challenges are no less serious.
Outside the company, whether it is a new force such as Tesla and Wei Xiaoli, or a traditional car company such as Volkswagen, Toyota and BBA, it has now been very clear that it has fully shifted to the field of electric vehicles. How to find his own position in the confrontation with these competitors and quickly increase his electric vehicle sales is Rowan's top priority. The electric flagship car of the SPA2 platform will be launched in 2022, when it will become the first big test for volvo's new owner. This model, which will be equipped with all of Volvo's most forward-looking and cutting-edge technologies, will be under pressure on the entire Volvo team, starting with Rowan, if it does not sell well.
With volvo's IPO, market capitalization management will also become an important issue for new CEOs. For today's auto companies, sales volume and profit margins are no longer the only two criteria for measuring market capitalization. How to win the trust of investors and continue to make the company's market value bigger and stronger will also be the requirements of shareholders to the CEO.
Across the group, how to coordinate the relationship with Geely will also be a bigger challenge for Rohm. Although Volvo welcomed the listing in the second half of last year, Geely is still the majority shareholder of Volvo Cars. Geely is no longer the Geely that bought Volvo for more than 10 years. In the past decade or so, although Volvo has ushered in rapid growth, Geely itself has grown faster. Whether at the technical level or at the international level, Geely has undergone a complete change. Therefore, in the future, Volvo Cars will no longer be a simple technology exporter in cooperation with Geely. Geely's achievements in areas including THE VAST SEA architecture and other areas are also expected to be used by Volvo. Therefore, how to seek greater synergy and scale effect with Geely will be one of the main influencing factors that will determine whether Volvo's journey in the next decade can be more exciting.
Another point that has to be mentioned is that Rowan has also led the famous Dyson car project in Dyson before. At that time, various information showed that Dyson had even built a prototype car. However, being stopped at the last minute by its founder James Dyson was a failure. At that time, it was rumored that Dyson had invested 20 billion yuan in electric vehicle projects, and after suspending the project, Dyson would only focus on core technologies such as solid-state batteries and robots. Of course, this volume and attractiveness are not the same as car building. Perhaps in Rowan's heart, there is also a fiery car-making heart. We don't know if Rowan's subsequent departure from Dyson was related to the termination of the car-making project, but if it is really related, then with Volvo's system and volume, it is the best platform for this cross-border executive to continue his previous car-making dream.
In the past, it was difficult to increase sales by launching new models, and seeking new breakthroughs in pure electric architecture, intelligent networking technology and new business models certainly required new ideas. In particular, the organic integration of Dyson's business model and Volvo is Rowan's strength, but it is also a challenge. It is not known whether Rowan, who came from Dyson, can bring the next brilliant decade to Volvo.