“For Volvo, safety is more than just protecting users from vehicle collisions. Volvo has a broader definition of safety: health, environmental protection, and providing users with a sense of security.” Yuan Xiaolin, President and CEO of Volvo Cars Asia Pacific .
“What’s your sense of security in 2022?” was the subject of Volvo’s talk show a few days ago.
A few days ago, Volvo’s “Resumption” conference in the first half of 2022 was held. In this event, Volvo used a talk show to summarize the brand’s market sales, customer care and channel construction in the first half of this year. , as a car brand with “safety” as its word-of-mouth label, Volvo also talked about its thinking about safety in the context of the new automobile era where technology is flying.
System resilience: July sales increased by 7% year-on-year
Due to the supply chain and the epidemic, luxury cars fell by more than 50% from April to May this year.
Volvo car sales also fell, but the decline was less than the broad market. From January to June, Volvo Cars sold 70,233 vehicles in China, down 26.3% year-on-year. “In June, our market share in Shanghai rebounded strongly,” said Qin Peiji, president of Volvo Greater China Sales.
The same is true. In July this year, Volvo sold a total of 15,472 new cars in China, a year-on-year increase of 7%.
Among them, the XC40 performed relatively well, achieving a year-on-year growth of 35% in July, while the S60 and XC60 both increased slightly. Yuan Xiaolin believes that the impact of the performance in the first half of the year is more due to supply and relatively short-term interference factors.
“Our system strength shows strong resilience.” Yuan Xiaolin said: “During the epidemic period, our dealer system was greatly impacted, from inventory to bank loans to operating costs. These problems involve distribution after the situation improves. Whether the business still has the ability to maintain a normal operation.”
Yuan Xiaolin said: “We have taken corresponding very pragmatic measures in these areas, such as providing wage support for some employees in different forms; extending the period together with the bank to ensure the health of the capital chain. At the same time, during the epidemic, we also further Expanding our sales channels, the total number of Volvo dealers increased to 289 in the first half of the year, and 10 new city center stores were added, all to make the whole system healthier and the layout more reasonable.”
It is understood that under the influence of the epidemic in the first half of this year, Volvo made a series of adjustments to spare parts and supply chain.
For example, after-sales spare parts are fully transferred from the original self-built system to the cooperation with Jingdong Logistics. In this way, the efficiency of the spare parts supply chain is improved, and management costs and resource waste are reduced. Under the new layout, 70%-80% of dealers can achieve the next-day delivery of urgent orders, and the overall delivery cycle of more than 30% of dealers is reduced.
“This incident also gives us a hint that as a business, what you can do is to be the best in a limited number of key areas, make your own characteristics, and become very competitive. In other business operations, whether in the automotive industry or in various industries, there will definitely be better and more professional companies. Where do we need to effectively cooperate with such the best partners, I think this It is a big idea to test the operation of the enterprise.” Yuan Xiaolin said.
Climate zero load in 2040, can Volvo do it？
It is worth mentioning that the sales performance of Volvo Cars’ electrified products is also particularly outstanding.
In July, Volvo’s pure electric models increased by 204% month-on-month, and the overall sales of pure electric models from January to July increased by 241% year-on-year. The rapid growth in sales of electrified products is inseparable from Volvo Cars’ strategic deployment in the electrified era.
Volvo Cars is the first traditional carmaker to propose a comprehensive electrification strategy and the first to say goodbye to a single internal combustion engine model. At the same time, Volvo evenly divides the process of electrification into a time node every five years.
According to the plan, Volvo Cars will be fully electrified by 2025, when the proportion of pure electric models will reach 50%, and the rest will be hybrid models; in 2030, Volvo Cars will become a pure electric luxury car company; in 2040, Volvo Cars will strive to become a Climate zero load benchmark enterprise.
However, in today’s electric and intelligent era, many new brands have emerged, luxury brands are following suit, and consumer demand is changing. Under such a background, how should Volvo choose between change and persistence?
“Safety, health, sustainability, and personalization will not change; it will not change based on customer needs.” Yuan Xiaolin said: “What will change? With the development of the times, digitalization, intelligent There are some corresponding changes brought about by modernization. If you look at Volvo’s 95-year history, Volvo has its own corresponding parts that need to be modernized in each historical period.”
“How to make the engine more efficient and how to make the car safer, these are the challenges faced by the automotive industry in different historical periods. How to make changes with the changes of the times and changes in consumer demand is what we have to face today. The right question, of course, all these changes are built on the same cornerstone, which is the safety, health, sustainability, and personalization I mentioned earlier.” Yuan Xiaolin said.
According to the narrow wholesale data of the China Passenger Transport Association, in the first half of 2022, Volvo Asia-Pacific new energy models sold 3,296 units, accounting for 5.2% of Volvo’s Asia-Pacific sales; Volvo’s global hybrid vehicles accounted for more than 30%.
At present, in the Chinese market, Volvo has launched XC60, XC90, S60, S90 plug-in hybrid versions. Qin Peiji said that there are two pure electric vehicles on sale now, the XC40 pure electric version and the new pure electric C40. They have entered the niche market, and the current market capacity is not enough. However, there will be products coming up soon. Next year, 3 or 4 pure electric models will be unveiled, and they will enter many market segments. The sales contribution will be reflected in the second half of next year to the beginning of the following year.
According to Volvo’s plan, Volvo Cars strives to become a climate zero-load benchmark enterprise by 2040. From an industry point of view, this target seems a bit aggressive. If Volvo is demanding environmental protection targets for carbon emissions, will it weaken the competitiveness of its products in terms of cost to a certain extent?
“We propose a climate zero load in 2040, which is to adapt to the development of the whole world. As one of the world’s leading car companies, this is also our responsibility.” Yuan Xiaolin divided the 2040 plan into four aspects. :
First, climate action. Volvo’s short- and medium-term goals are to reduce carbon emissions by an average of 40% in the entire life cycle of each vehicle from 2018 to 2025, and reduce carbon dioxide emissions throughout the value chain, including 3 emissions reductions of 50% and global supply chain carbon reductions of 25% %, reducing carbon emissions by 25% in the overall operation of the enterprise.
Second, circular economy. Maximize resource efficiency, value retention, and useful life through product design, development, and manufacturing, and avoid waste; remanufacture and reuse existing parts wherever possible; continue to develop sustainable business models, and more.
Third, business ethics and responsibility. For example, in the procurement business, priority is given to partners with strong sustainability, and a supply chain with the same value pursuit is created.
（Environmental）、（Social）（Governance），“When we talk about corporate costs, we are talking about not only material costs and operating costs, but also corporate ESG, including environmental, social and corporate governance, in addition to carbon credits, carbon trading, etc. They are all costs that need to be considered in the operation of enterprises.” Yuan Xiaolin said: “Whether or not to increase costs, we must balance various aspects. Zero load is the general trend. There has been such experience in the past few years. There will be new insights, but it is impossible not to do this.”
In any era, safety is the premise of everything
“Everything is uncertain, and uncertainty will lead to a lack of security.” Yuan Xiaolin said.
It has to be said that although the current market volume of new power brands is relatively small, the momentum of its development has made the otherwise calm automobile industry turbulent. The development of electrification and intelligence brings vitality to the automotive industry, but also brings many uncertainties.
More and more brands and new car forces have also begun to emphasize safety. Is this a challenge for Volvo, which has always been labelled “safety”. In this era of intelligent new energy, how can Volvo use this intelligent technology to arm itself and reshape the sense of security in the new car era? How does technology have new guarantees and paths?
“Safety, sustainability, and personalization of Northern Europe. This is what Volvo wants to present, so my products and services must be safe, healthy, sustainable and personalized, and I must be willing to spend time and continue to invest. Only funds can form and continuously strengthen our core advantages.” Yuan Xiaolin said.
In Volvo’s view, safety has a multi-dimensional understanding. From the perspective of “narrow safety”, the investment in car safety in the past few decades has mainly focused on advanced materials, production processes, active and passive safety systems, collision prevention and coverage of consumption. The service of the whole life cycle of the user’s car, safety runs through from manufacturing to after-sales service; entering the new automobile era, in addition to maintaining the original leading edge, Volvo believes that “generalized safety” includes health, environmental protection and providing users with higher A safe travel experience.
For example, at the intelligent track level, Volvo’s future products will be equipped with the self-developed integrated in-vehicle system “VolvoCars.OS” to achieve faster and more flexible function development and upgrades, and enjoy more online services throughout its life cycle. Remote Upgrade (OTA).
Yuan Xiaolin emphasized: “For core areas, such as safety, and the underlying technology, we must lead. For example, Volvo is one of the very few car manufacturers that has complete self-developed ADAS capabilities, and has self-developed central computing platform VolvoCars.OS. In areas such as application services, we actively promote cooperation with leading technology companies. Volvo Cars is in a leading position in the openness of its vehicle and machine ecology.”
At the level of intelligent hardware and algorithms, the next generation of Volvo Cars will be equipped with Luminar lidar as standard, and will be hardware ready for the future of highly autonomous driving.
At the level of three electric motors that users care about, Volvo Cars has set up the Asia-Pacific Motor Laboratory in Jiading, Shanghai, which is Volvo’s first motor laboratory outside of Gothenburg, Sweden. Volvo will also work with Northvolt to build a new battery manufacturing plant in Gothenburg to develop more advanced lithium-ion battery technology to achieve longer cruising range and faster charging while ensuring greater safety.
“Safety is always the premise of all travel in any era. Our investment in safety over the past few decades, including the safety center, including the entire safety in the product development and production process, has received attention, including from materials, production processes, Partners, and then to our services covering the entire life cycle of the car, safety is a very clear main line. Of course, with the development of the new four modernizations, battery safety, body safety, information safety, and autonomous driving safety technologies must also be It is within our entire security system efforts.” Yuan Xiaolin said.
car cloud summary
Since its establishment in 1927, it has gone through 95 years of brand history. As a luxury car brand with a history of more than 90 years, Volvo has shown us the experience and ability of this company to perceive the era and respond to challenges in the face of the “new four modernizations” industry changes.
In the process of self-transformation, Volvo is also well aware of “the way of offense and defense”. For example, the rapid growth in the sales of electrified products is inseparable from Volvo Cars’ deep insight into consumer demand in the electrified era and the continuous changes and upgrades to new business models. But Volvo insists that in the age of electrification, users still seek a sense of safety. Volvo’s creed will never change, no matter how iterates in automotive technology.
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