February 26, 2023

Volvo | The Decline of Volvo’s Safety Leadership in Automotive

 If you imagine how a human being getting thrown out of a car during an accident or imagine a person sitting right back to you in a car becoming a projectile when the car gets collided from the front. This happens after the collision when the car is stopped suddenly, but your body wants to stay in motion and it gets stopped only after colliding with something. This whole concept is based on Newton's First Law of Motion

And the same law was observed in the accident case of Cyrus Mistry when he died in a car accident because he became a projectile inside his car. All these people would not have died if they had used the three-point seat belt which was introduced by Volvo during the 1950s and this belt saves 15,000 lives per year. 

Leader of Safety Car: Volvo

In the US alone Volvo invented 3 point seat belt during a time when some manufacturers were busy increasing the speed of vehicles. Some manufacturers were busy increasing the size of the cars and some manufacturers were busy improving the mileage of the car. That's why in the current market Volvo is known for manufacturing safe vehicles like the way, Bugatti is known for its high-speed cars Volvo invented the seat belt. 

But it was not the only reason due to the safety associated with the brand Volvo. Volvo had also introduced Curtain airbags, blindspot detection, door over protection, and many such safety features that have been either invented by Volvo. Volvo was among the first manufacturers which used these safety features in their vehicles. And that's why in the whole world the safety ratings of Volvo have always remained high.

Why Volvo has lost its identity in manufacturing safe vehicles

But today, things have changed because now, Volvo has lost its identity in manufacturing safe vehicles because all these cars have performed exceptionally in the Euro NCAP in the whole world. And only one car from Volvo has been listed in this chart and that too at the 17th position.

Volvo | Safety System Volvo | History of Volvo

This was about a global list but if we talk about India then, the Indian manufacturers have now started performing better in terms of safety standards even the cheapest car of TATA MOTORS has a 4-star Global NCAP rating. This is an outstanding fact that the world is Manufacturing safer cars but in one way or another other due to this, today, Volvo is struggling. In the last 2 decades. This company has been sold twice once it was acquired by Ford. And today it is under a Chinese auto manufacturing company.

Volvo with its Innovations and safety standards became a leader in the world and how after losing its identity, it got trapped in losses under Ford, let's understand this in this article.

History of Volvo Car Company

The story of Volvo starts in the year 1927 when the parent company of Volvo used to manufacture ball bearings and ball bearings were used heavily during World War 1. This company used to bathe in money at that time now, this company wanted to utilize this money correctly and they decided to start an automotive company. The founders Assar Gabrielsson and Gustav Larson Started a car Manufacturing Company whose motive was to save the lives of the people and Volvo started inducing its intention of building safe cars.

How Volvo became the market leader in the world with its safety?

From the very early stage of its origination In the year 1944, Volvo introduced its first passenger car PV444 this car was based on a unibody design. While almost all the cars at that time were based on ladder frame chassis. Volvo did differently from others because the unibody design was safer in comparison to others. But not only this, Volvo started providing safety cages for its first car which was built with high-end stainless steel and not only this PV444 came with a laminated glass windshield. So that the glass pieces do not harm the passenger during any accident Volvo has remained innovative from its very first cars in terms of its safety features. But the biggest innovation done by Volvo Was during the 1950s. When Nils Bohlin, an engineer at Volvo Prepared a design for the three-point seat belt during the 1950s, the Detroit plants used to work on full load in the US. But the manufacturers barely thought about the lives of their users. It can be observed that today, a three-point seat belt is available in every vehicle, as a basic safety feature and it is because Volvo is a good inventor.

Volvo's Seat Belt Patent 

A great brand because even though Volvo had the patented rights to this seat belt Still, Volvo still made this feature free to use for other manufacturers as well. This was the biggest revolutionary invention done by Volvo. But Volvo did many other inventions as well in the safety department. Apart from this safety belt, in the year 1964, Volvo introduced its Rear-facing child seats. In the year 1978, Volvo introduced its Booster seats and in the year 1991, Volvo started providing seat belts in the rear seats of the cars as well. it was made a norm in the cars of Volvo and in the very same year, Volvo also introduced a side impact safety protection system in its cars. This system used to come by default in all Volvo cars After this, in the year 1997, Volvo in its C70 sports car introduced the rollover protection system. This was a system or structure which, at the time of overturn or rollover Saves the passenger from any injury. By either preventing the rollover or protecting the passengers after the rollover exactly a year later, After introducing this safety feature.

In the year 1988, Volvo invented its famous WHIPS, And in the year 1999, It was made compulsory in all Volvo cars WHIPS stands for Whiplash Protection System. This invention helps in the prevention of neck injuries during the occurrence of a sudden accident. Volvo's own traffic accident research team According to them, WHIPS has resulted in a 33% reduction in short-term injuries and a 54% reduction in long-term injuries. With all these safety features which were just mentioned. We can understand that Volvo is a great innovator in terms of safety standards and it was continuously achieving such milestones for safety features.

Volvo Sold to Ford

But the parent company of Volvo AB Volvo, In the year 1999, Sold its car business for $ 6.5 Billion To the Ford Group. The parent company of Volvo, AB Volvo Apart from cars also manufactured Trucks, construction equipment, buses, and industrial engines AB Volvo was doing exceptionally well in all these businesses during the 90s as well, and the car business of AB Volvo was also profitable. But this was said by AB Volvo in the clarification for this If we Analyse the demand of car manufacturers in the future. Then it would be beneficial for Volvo cars that it should get under a bigger auto-manufacturing entity. To get the benefit of subsequent economies and scale.

Volvo scaled exceptionally after getting associated with the Ford Group. In the year 1998, the global sales of Volvo were around 1,03,000 units per year In the year 2008, It increased by three times And became around 3,74,000 per year. Under the Ford Group as well Volvo did not stop its innovations in terms of safety standards In the year 2003, Volvo launched its Blind Spot Information System which is BLIS. In the year 2006, Volvo introduced electronic parking brakes and also introduced Pedestrian Detection with Auto Brake System due to this hard work Volvo Volvo XC 90 is a such car. In the last 20 years since the day it has been launched Since that day, none of the passengers have died in this car.

The Safety Race: How Volvo's Competitors Are Outpacing the Once-Unbeatable Automaker

Why did Ford Group sell Volvo?

All things very going smoothly the sales figures of Volvo increased by three times but still, the Ford Group sold Volvo at a loss of $ 4 Billion In the year 2009, to Geely which is a Chinese company now the question arises, Why the Ford Group did so? This has two big reasons.

First was the drop in profit margins for Volvo.

Second, Volvo had lost its USP in Safety Ford Group placed Volvo as its luxury brand subsidiary.
During 2008, due to the recession, Ford Group sold its all brands in its Premiere Automotive Group Like Jaguar, Land Rover, Aston Martin, and Volvo. We can understand that Volvo always lagged behind the sales figures of the German Trio but what was the underlying reason? 

In the 20th century, People used to buy Volvo cars because of their Safety features even though Volvo is a luxury car brand still, it is not the main attraction for people considering a Volvo car and it was because Volvo used to spend more on providing safety features and not a luxury. The safety department of Volvo was more innovative due to this, Volvo used to lag behind the German Trio in terms of luxury and performance and the Volvo cars were equally expensive as the cars of the German Trio things started changing in the 21st century. Volvo started losing its only USP.

How Volvo Lost Its Edge in Automotive Safety

It is because the safety norms were getting stricter by the governments from around the world due to this, the car manufacturers were bound to provide good safety standards in all their cars and consumers also started demanding safer cars and due to this, cars from every segment started coming up with good safety ratings and for the safety of passengers on roads. People were not bound to buy a Volvo car only and it can be observed today that. Many brands are capable of meeting the safety standards of Volvo and many times the safety ratings of economical cars beat the safety standards of a Volvo car. Even though economical car brands are capable of providing good safety ratings. But there could be another reason behind this as well maybe the organization which is involved in conducting the safety procedures. Do not involve in a strict safety test for the economical cars as done by Volvo itself on its cars because many people do not want to spend heavily for a small safety upgradation due to all these reasons. 

A Chinese company Geely acquired Volvo in the year 2009.  Volvo was running under losses at that time Geely is a cheap car manufacturing company in China and similar to the TATA MOTORS and JLR case, Geely did not have the knowledge of manufacturing luxury cars and that's why Geely only funded Volvo. And allowed Volvo to operate independently this proved to be a correct decision similar to the case of Jaguar and Land Rover.

Volvo Cars in 2023

In the last decade, Volvo has made its cars more appealing in terms of luxury and now the Volvo cars look more appealing in design. A different type of luxurious feel is also provided by Volvo in its interiors. So, the Volvo cars can be well differentiated from other cars and because of all these things Volvo has turned out to be profitable, Volvo is still very small in comparison to the German Trio. But they are doing better now what Volvo is doing today Is not revolutionary at all like it used to do during the 90s. But still, Volvo is engaged in saving something earlier Volvo used to save the lives of the people, and now they are saving the environment. that's why for the past 2-3 years, Volvo is only selling hybrid cars in the coming future, The USP of Volvo would be Electric + Safe + Luxury. This means Volvo is going to completely stop the manufacturing of ICE-based Cars shortly.

In its Premier Automotive Group which also included Land Rover, Aston Martin, and Jaguar Volvo was always in direct competition with the German trio Mercedes Benz, BMW, and Audi. But one thing was very common with Volvo and that was the fact of lagging behind all these brands in terms of sales. Even though the sales figures of Volvo were exceptional but still, it was very less in comparison to the German trio. In the year 2008, Volvo sold 3,50,000 units of its cars in the whole world but in the very same year, BMW sold 12,00,000 units of its cars, and this fact of having competitively very fewer sales figures. Due to this fact, And the fact of Volvo has fewer profit margins. In the year 1988, Volvo cars made a profit of $ 476 Million despite having three times more sales in the year 2008. Volve faced a loss of $ 1.5 Billion in the year 2008 this could be a problem with Volvo because the Ford Group itself was under heavy turbulence at that time.

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