 |
 | Home | Contact Us | FAQ | Search & Site Map | Link to Us |
 | Sign In | Join | Other 45 Sites in Network |
Car Forum / Volvo Cars / April 2006Volvo: Profitable in US?
I've heard that despite Ford's financial problems, Volvo is their "cash cow" in the US. Is this true? Does the Volvo brand make money in the US or are they losing their butts like, for example, Volkswagen? I can't answer that question, but you very much surprised me saying VW was losing money. I wouldn't want to steer off topic, but could you briefly elaborate as to why VW would be losing money? I understand GM's reasons as well as Ford's -- as far as unions and health care and pensions go. Not to mention good trucks and some crappy cars (not all). But the Japanese are mopping up with superb quality and kicking butt. VW and German cars have a very solid reputation and are a great product. How/why would they be losing money? I agree that VW's are great, but Consumer Reports doesn't think so. I've been a VW guy for 40 years, but since 2001, their US Sales plummeted by 37%. Finally, now, in 2006, sales are going back up. In Germany, they also have Labor Unions, and for some reason, it costs them 1/3 more than other automakers to produce a car. With the exchange rates of the Euro vs the Dollar and the German Labor unions, VWAG has lost nearly 3 billion dollars here since 2004. Fortunately, the profits in Europe and elsewhere have offset that. VWAG is trying to restructure, but they don't believe they can be profitable here in America until 2008 or so, and THAT's only if they stay on the current track. I love VW, and want them to remain here, but in case something happens, I'm exploring Volvo. ...I know the thread has drifted ot but I wanted to say that, in talking to a few recent VW owners, they were quite dissatisfied with quality. Seems the cars run and drive just great, but all sorts of body hardware and other secondary stuff breaks......I had a VW fox, a '91. Maybe not pertinent to todays situation, but that brazilian made car handled just great, and the 1.8 engine was bullet proof......but the drivers seat back broke and so did three of the four outside door handles, drivers door included...made me mad. I don't think we drifted at all. I think the main case here is why so many of great classic brands like Volvo, SAAB or VW allowed to make such radical changes in their manufacturing, design or management that they turn off the majority of their so far loyal customers: - Volvo group allowed Ford to take over their cars in 1999. Since then the quality of components used is just awful (throttle, sensors, bulbs, etc. etc.) - SAAB taken over by GM is in the same category (I know - my other car is 9/3 Viggen) - VW moved the manufacturing to Mexico and problems started since then. I drove 97 VR6 to over 120k miles with no issues at all only because it was original from Volksburg. I hope that they will all finally learn the lesson and figure out that good complex product is a sum of good design and technical culture that usually is specific to a nation and cannot be exported or outsourced. -Peter > ...I know the thread has drifted ot but I wanted to say that, in talking to > a few recent VW owners, they were quite dissatisfied with quality. Seems the [quoted text clipped - 3 lines] > 1.8 engine was bullet proof......but the drivers seat back broke and so did > three of the four outside door handles, drivers door included...made me mad. >I don't think we drifted at all. I think the main case here is why so many >of great classic brands like Volvo, SAAB or VW allowed to make such radical [quoted text clipped - 24 lines] >> broke and so did three of the four outside door handles, drivers door >> included...made me mad. Volvo didn't "allow" Ford to take it over, Volvo was up for sale, and there were many suitors, including Fiat... Fiat owns Ferrari, Maserati, Alfa Romeo and Lancia... Does that mean Maserati cars are crap because Fiat owns them? Are Ferraris worse off cuz Alfa Romeo is in their family? Ford and Volvo are TWO very different car companies. The ONLY car that is currently based on a joint platform is the S40/V50 - Mazda/Ford/Volvo... I don't know about the XC90. The S60 was engineered far before Ford owned them, it generally takes 4 years max for a car to come to market, depending on the level of engineering and if it's a completely new design or just a redesign. The Saab 93 Viggen is more Saab than GM, period. The Ecotec is a world engine, period. Yes, it is in the Cobalt, and yes, it's in the Opel, yes, it's probably in Holdens as well... You're quite far off the mark in vehicle comparisons. I don't think you can find a Saab component in the typical GM parts bin on ANY other car (the engine is unique to the Saab, turbo, layout, etc..), Hmmm, Daimler owns Chrysler.. so what, the 300C is a good car cuz it has Mercedes components throughout? It's a good car cuz it was well engineered. When I think of Volvo, I don't think of Ford... I think of a great car that has little or nothing to do with Ford except owenership (no parts bin). Peter, You make great points on the "parts" parts of the cars. If I were to play devil's advocate - just to counter a point, it would be this. While the materials and possibly the engineering may remain unique with respect to the Ford/Volvos and GM/Saabs, what bothers me is that now you have the Ford way of thinking leading the way for Volvo and the GM way of thinking leading Saab. This is not to say that either the Ford or GM way of thinking is bad, but rather for me it makes me think, "OK, if Ford owns Volvo - what kind of shape are they in?" If Ford's way of doing business thus far has been unsuccessful, I ask myself how can this improve Volvo?" Sure, if Volvo has a money issue and needs a buyer just to stay alive, that's another issue. Same with GMC. Think about it this way, if BMW bought Ford, I would say, "wow" - now Ford is going to maybe ascend toward BMW quality. If Ford bought BMW, I would say, "darn", now the ultimate driving maching is going to be "Ford tough." Probably more a mental mindset for me, but that's my 2 cents. > Peter, > You make great points on the "parts" parts of the cars. If I were to [quoted text clipped - 17 lines] > > Probably more a mental mindset for me, but that's my 2 cents. Or the way I have summarized it in the past: DaimlerChrysler Mercedes styling combined with Chrysler engineering Howard > Mercedes styling combined with Chrysler engineering Both Benz (E-class and S-class) and Chrysler (300 V8) make the least reliable cars. But so does Lincoln (LS). I hope this doesn't reflect on Volvo.  SignatureCheers, Steve Henning in Reading, PA, USA Owned '67,'68,'71,'74,'79,'81,'87,'93,'95 & '01 Volvos. The '67,'74,'79,'87,'95 and '01 through European Delivery. http://home.earthlink.net/~rhodyman/volvo.html ... > You're quite far off the mark in vehicle comparisons. I don't think you can > find a Saab component in the typical GM parts bin on ANY other car (the > engine is unique to the Saab, turbo, layout, etc..), MRS - I don't think you read my article correctly. It was NOT about technical comparisons - it was about the strategic management decisions car manufacturers make these days and their dismal results. So far what I see is that 3 great european brands do everything to be completely outrun by Japanese. American brands where never in the race IMHO. BTW - my "world class" SAAB Viggen engine with GM parts in it broke balancing chain after 50k miles cracking the small block, etc. Dealer repair cost $10,000. - few hundred miles after GM warranty. -Peter > ... >> [quoted text clipped - 14 lines] > > -Peter cracking the small block?? You mean the bottom end... a small block is a North American reference to V-8 engine size (small block, big block). You may mean "short" block, which is still not a valid reference, since a short block is typically a reference to a state of a motor build, ie: short block has pistons, rods, bearings, no cylinder head. Ford learns more from Volvo than what flows the other way. Volvo is still a stand alone company. Now, when I see some Jaguars, I see Ford Taurus.. that's a different story. What I find intersting is that the Ford Fusion/Mercury Milan siblings have scored poorly in offset crash tests, so Volvo's influence of safety must have been overlooked, at least with these particular models. Nevertheless, the original question, which still hasn't been answered, is: Does Volvo make or lose money in the US market? > What I find intersting is that the Ford Fusion/Mercury Milan siblings have > scored poorly in offset crash tests, so Volvo's influence of safety must > have been overlooked, at least with these particular models. That is because they introduced it before the testing. It will now have the side curtains which make it acceptable standard rather than optional. This is an improvement at Ford. It goes along with the corporate image it tried to buy when it bought Volvo Cars. SignatureCheers, Steve Henning in Reading, PA, USA Owned '67,'68,'71,'74,'79,'81,'87,'93,'95 & '01 Volvos. The '67,'74,'79,'87,'95 and '01 through European Delivery. http://home.earthlink.net/~rhodyman/volvo.html >> What I find intersting is that the Ford Fusion/Mercury Milan siblings >> have [quoted text clipped - 5 lines] > optional. This is an improvement at Ford. It goes along with the > corporate image it tried to buy when it bought Volvo Cars. Trust me, the cars did get crash tested before they were introduced (by Ford)... It's all done by computer simulation. However, IIHS does different testing at different levels. These are not mandatory to follow, they just look good for the insurance regulators. If you do some reading into IIHS, pretty much NONE of the cars do very well (Volvo is the exception), and thus, your rates are higher. > Trust me, the cars did get crash tested before they were introduced (by > Ford)... > > It's all done by computer simulation. Can you tell us more? Did the occupant's heads hit the window in the computer simulated tests? That is what they failed on. Nothing else. That is why making side air curtains mandatory solves the problem. SignatureCheers, Steve Henning in Reading, PA, USA Owned '67,'68,'71,'74,'79,'81,'87,'93,'95 & '01 Volvos. The '67,'74,'79,'87,'95 and '01 through European Delivery. http://home.earthlink.net/~rhodyman/volvo.html > If you do some reading into IIHS, pretty much NONE of the cars do very well > (Volvo is the exception), and thus, your rates are higher. This is wishful thinking. Many cars do better than Volvo. They like testing because it is before the fact, but they are heavily swayed by claims history and Volvo is not the best. It is better than average, but not the best. The 850/V70 has the best claims history for Volvo. SignaturePardon my spam deterrent; send email to rhodyman@earthlink.net Cheers, Steve Henning in Reading, PA USA http://home.earthlink.net/~rhodyman > What I find intersting is that the Ford Fusion/Mercury Milan siblings have > scored poorly in offset crash tests, so Volvo's influence of safety must > have been overlooked, at least with these particular models. The Fusion is based on the Mazda 6, not any Volvo platform. But that's still puzzling because the Mazda 6 has pretty good safety ratings. > Nevertheless, > the original question, which still hasn't been answered, is: Does Volvo > make or lose money in the US market? Last time I saw numbers (2004), Volvo made money in the US market. AC SignatureEmail: echo 142322093203359315271794620168064975321554275890186P | dc Amazing to recall that when Ford bought Volvo's automobile operation for a bit over six billion in 1999, Ford was America's most profitable car manufacturer. Not anymore. Volvo, the company still exists in Sweden, but they build trucks and are raking in the money. In contrast, "Fjord" has seen a massive diminishment of profits. >I can't answer that question, but you very much surprised me saying VW > was losing money. I wouldn't want to steer off topic, but could you [quoted text clipped - 5 lines] > kicking butt. VW and German cars have a very solid reputation and are a > great product. How/why would they be losing money? Solid reputation? According to whom? Euro cars esp. MB & VW have abysmal reliability. > > I understand GM's reasons as well as Ford's -- as far as unions and > > health care and pensions go. Not to mention good trucks and some crappy [quoted text clipped - 4 lines] > Solid reputation? According to whom? Euro cars esp. MB & VW have abysmal > reliability. Actually the only Euro cars with abysmal records are the Jag, Benz, Saab, BMW,and Audi. The VW has not had the distinction, nor have the Land Rover, Porsche, and Volvo. There are many Japanese brands that are not in the most reliable column such as Acura, Infinity, Isuzu, Mazda, Misubishi, Nissan, Subaru and Suzuki. So buying a Japanese brand is not a guarantee of reliability. Here are lists from the largest automotive reliability surveys: Most Reliable Models: Toyota Echo, Toyota Prius, Toyota Corolla, Lexus IS300 (2005), Toyota Camry, Honda Accord 4-cyl., Lexus LS430. Least Reliable Models: Chevrolet Cobalt, Jaguar S-Type, Lincoln LS, Mercedes-Benz E-Class, Saab 9-3, Mercedes-Benz S-Class, BMW 5 Series (V8), Audi A8, Chrysler 300 (V8), BMW 7 Series. Volvo doesn't make either list. It should be noted that these lists are the results of reliability in the first 5 or so years. It does not reflect on long term reliability. There are some makes that have a few early problems but then last forever. I think Volvo is one of those. My 11 year old Volvo had very few problems and is still like new. Then there are others that are reliable when new but then go to pot. I know that Subaru is one of those. My 11 year old Subaru had a long list of problems before it was condemned by State Inspectors because it rusted out, even the brake mechanisms rusted. Many parts were replaced because of rust including the complete tail gate, but the basic structures of the car were also fatally compromised and this car was kept in a garage and had dealer service. Regarding profitability, Ford is trying to use the safety record of the Volvo Brand to make its other brands more profitable. Every Ford brand is sold as having safety backed by Volvo Engineers. It is hard to put such brand carryover into the profit margin. SignatureCheers, Steve Henning in Reading, PA, USA Owned '67,'68,'71,'74,'79,'81,'87,'93,'95 & '01 Volvos. The '67,'74,'79,'87,'95 and '01 through European Delivery. http://home.earthlink.net/~rhodyman/volvo.html > Actually the only Euro cars with abysmal records are the Jag, Benz, > Saab, BMW,and Audi. Saabs still have fanastic reliability. It just isn't as good as it was Pre-GM. Still better than most though. SignatureCarl Robson Car PC Build starts again. http://smallr.com/rz Homepage: http://www.bouncing-czechs.com >> Actually the only Euro cars with abysmal records are the Jag, Benz, >> Saab, BMW,and Audi. >> > Saabs still have fanastic reliability. It just isn't as good as it was > Pre-GM. Still better than most though. Maybe.. but GM has nothing to do with wheter Saab is reliable or not. GM owned a bit of Fiat, did that make Fiats any more UNreliable??? ;)... heheheh, Fiats were reliable, they just rusted before the warranty ended. Good to hear about Saabs. My only experience was that in 1988 my highschool buddy's mother won a Saab 900 in one of those mall raffles. It was red with a black spoiler across the back - very sharp. Well, my friend was on a date with another couple after about 8 weeks of owning the car. He made a curve too quickly one night, ditched the car and twisted the frame. Insurance claimed it a total loss. Oh the joy he had waking up mom and dad and telling them about the new car. > > Actually the only Euro cars with abysmal records are the Jag, Benz, > > Saab, BMW,and Audi. > > > Saabs still have fanastic reliability. It just isn't as good as it was > Pre-GM. Still better than most though. > -- I think the pre-GM reliability is a myth - if my old 99 and 900 were representative samples. On the other hand, my wife's '99 9-3 and my '95 9000 have been trouble-free. > Saabs still have fanastic reliability. It just isn't as good as it was > Pre-GM. Still better than most though. Wrong, Audi just has average reliability, which is not bad with today's cars. Volvo is in the same boat. SignaturePardon my spam deterrent; send email to rhodyman@earthlink.net Cheers, Steve Henning in Reading, PA USA http://home.earthlink.net/~rhodyman > I've heard that despite Ford's financial problems, Volvo is their "cash > cow" in the US. Is this true? Does the Volvo brand make money in the US or > are they losing their butts like, for example, Volkswagen? There was a rumor floating around a while back that Ford was going to divest themselves of Volvo. Ford Chairman denied it, just like the same rumor about Jaguar. Volvo profits are supposedly down for Ford since acquisition, but with creative accounting, who realy knows. I do know that the dealer is VERY hesitant to replace anything under warranty, even the completely dead front struts at 32K. I do know one thing and that is that Ford wants to extend the model life of all the 70 series because they are really still reaping the rewards of the last fully, in-house design of these cars...if they would just stop cutting costs on the components, like that for-sh.t Marelli throttle body. |
Reply to this Message |
 Sign In
 Join
 My Latest Posts My Monitored Threads My Blog My Photo Gallery My Profile My Homepage Start New Thread Enable EMail Alerts Rate this Thread
|
©2008 Advenet LLC Privacy Policy - Terms of Use
This website includes both content owned or controlled by Advenet as well as content owned or controlled by third parties.