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An Interview with John Maloney

35K views 185 replies 26 participants last post by  S60inATL 
#1 ·
At the 2012 Detroit Auto Show, we had a few moments with John Maloney, President Volvo Cars, U.S., and Geno Effler, VP of Public Affairs at Volvo Cars of North America to discuss a few of the popular questions from our readers.

FULL STORY
 
#86 · (Edited)
Excimer,

Getting past the "I must buy a Volvo and nothing but" mindset is a very hard thing go through, but once I did it and got the TDI I've never regretted it.

Volvo is going to do what Volvo is going to do.

Swedespeeders will to what they do (talk about what VCNA should do and wind up making very little impact on the actual decisions).

So to me it's not worth the effort to try and explain it to Volvo as everything I say gets filtered in a way that results in the same decision being made that they wanted to make all along despite my input. But I think of it this way: It's their company. It's my money.

If they want to go the way of Kodak, then I really can't do anything about it. Nor is it really my job to try and convince them otherwise. To me the gas-hybrid does not represent a "10-year and beyond" vehicle as it has too many battery charge cycles (Over 3000 in a 10-year life) and uses ethanol-laden fuels mandated in this country (with all the associated maintenance headaches of gas-powered vehicles plus lower fuel economy) and if I read it right it can't even charge its own battery. Ugh.

But Volvo has to keep in mind that people like me are not their customer base. They have to concentrate on the people who like to keep pumping their money into depreciating assets, otherwise Volvo will starve. So cut 'em some slack and go buy what you want when you're ready. If Volvo and you have similar offerings/desires, make the deal. If not, find it somewhere else and don't regret it.
 
#81 ·
The 3mo/3000mi Passat TDI test drive and the 11/111,000 were the top 2 for the ones most likely to be received by the American public. They may not have necessarily been the ones enthusiasts would have chosen but they seemed to make the most sense. There was another service type program that was in the top 3 but I can't remember what it was.

The enthusiasts seemed to like the short leases so they could flip cars :)

The idea of being able to buy one car and have access to another for special occasions was interesting and if the logistics could be worked out, a pretty compelling differentiator. But on the dealership side, I think it would be a nightmare. A combination of time-share, and service vehicle fleet management. I think that alone made it an unrealistic program.

The consultants they used were from the UK and they broke up the day with clips from British TV comedy shows that integrated with the various segment we were working. We did a lot of mind mapping type of techniques, word associations, core brand key words - mental exercises that got everyone thinking less about one vehicle and more about the brand as a whole.
 
#82 ·
I thought it was an excellent interview - well done. Not so sure I agree with everything Maloney had to say but so be it....

Given the relatively poor sales of the C30 - why don't they axe that model and bring the new v40 stateside? The C30 is a compact hatch that has little to no utility. Who is buying this car? College kids that don't want a Golf? Get rid of it.

The new v40 would be (a) an actual wagon and (b) a much cheaper alternative to the Audi, BMW, MB offerings. I wish that question was posed to him.
 
#83 · (Edited)
315 R - the C30 is a city car and I sell cars in a city. We have done very well with the C30 since day 1. We frequently park a C30 with the back end facing the sidewalk (as we're not an "auto row" store, the sidewalk is just an urban sidewalk) and even now we have quite a few people stop and point and smile and show the friend they're walking with that cool looking car in the window. The two questions these folks ask when they stick their heads in the door are 2) is that a new car? I didn't know Volvo made this - how long has it been out? and 1) does that come in AWD? It's true that, as Americans are programed to think that small means cheap and economy, that there are quite a few folks that are disappointed at the fuel economy numbers - they were expecting 28 city/38 hwy or something similar. And yes, there are a few that expect the car to cost a bit less although generally these folks are not familiar with Volvo as a brand beyond the 240. All in all, the C30 is a great city car with real curb appeal. While I would like to see a 4 door version of the C30, I for one do not want to see the 2-door go away. Now, if the hatch could be revised to open with a flat floor rather than it is now with just the glass shaped hole, I think that would really help sales
 
#84 ·
so how many sales do you lose because its not AWD :)
 
#88 ·
Hard to say. Certainly, there are quite a few folks that buy anyways - it's a front wheel drive car with a tranverse mounted engine and standard traction control - as the car is fine for snow driving (unless you're a moron). Most of the ones I "lose" are likely the ones I barely talk to or never see at all as AWD is a requirement on their shopping list. What I do know is that it is a question I have gotten constantly since the car was launched.

315 R - How about a C40 and a V40? Honestly, the low volume of sales has as much to do with the low volume of inventory for me. Other markets, maybe not so much. Besides, with that new Gary Busey endorsement, things are bound to take off ! (goolge Gary Busey and dance or just check out the last Gary Busey appearance on TMZ. sigh)
 
#85 ·
Seattle - it's a cute car. Don't get me wrong but if you're going to slap 2 more doors on it.....then you might as well bring over the all new v40 that comes with AWD. It's pricey for the segment and the Benz "A" whatever, the BMW 1 series and Audi A1 are on their way over state side. C30 sales are only going to go one way unless they dramatically boost the MPG and put Sensus in it.

I don't mean to knock it - its a nice car but the low volume sales aren't going to go anywhere but downward. My post wasn't meant to be a testament to the C30's short comings as it was a plea to see the upside of a fresh new v40 wagon.
 
#90 ·
It feels more like if I keep telling my "lover" how much I love her long, brown hair and then she shows up one day with a blonde pixie cut. I ask her why and she says " I thought you would like it". First off, I'm gonna wonder just why she thought I would like it. Then, I'm gonna figure out that it's not really me she's trying to impress, but her "tennis coach".
 
#93 ·
Guys, I wanted to interject here because I have a lot of interview experience and also because I've known John Maloney since before the P2 R era. He's a good guy and, though he's ex-Ford, he's one of the most enthusiastic Volvo execs I've ever met... enthusiastic for the Volvo brand. He's owned multiple Rs and is a huge proponent of Volvo's motorsport endeavours from the At Speed Racing days until now. He's made all of that happen.

So first, an admission. We had to re-create about 3/4 of this conversation as we had a recorder malfunction that was my fault. Remembering the conversation between those of us in the room, we recreated the questions and John and the PR person in the room were patient and kind enough to recreate the answers. As such it may read a little more manufactured than the natural flow of conversation but the content remained.

On the content, here's the challenge for guys like John. VCNA is effectively an importer. They're a large importer, but an importer. I'm not privy to the specific level of say that they have but usually this means high level product strategy takes place in the home market (or maybe China now as well) and that high level strategy such as 4-cylinder hybrids being the new push now is something that likely isn't even a decision for him. Diesel may have been a market decision but also covering the Audi beat I know some of the costs that go into this analysis. To run a diesel in America and meet BIN5 requirements you need to do some sort of urea injection. Smaller cars with 4-cylinders may not need this but larger and heavier cars or larger engines do. On one hand, the Volvo D5 is one engine that htey could develop and install in all of their product. Even still, there's no guarantee of success and now that they're not at Ford they can't apply economies of scale across large volumes as Audi does. The VW/Audi 3.0 TDI goes across the VW Touareg, Audi Q7 and soon Q5, A8 and maybe A6. The volume associated is much higher and the costs can then easily be pushed out further to even Porsche Cayenne or even more.


Given all of this, diesel may not have been a good decision for Volvo. We all would like to see it but it probably would have added a very high cost premium to models in which it was offered, which I’m guessing was modeled out and deemed uncompetitive. That stinks, but it’s the basic thing that these guys model out and mull over. And their job security isn’t based on how enthusiastic guys like us are, they’re based on sales growth and we’re a minority.

Hybrids sell better in the USA and there’s no BIN5 requirement on the production of a hybrid. More than likely VCNA and VCC people were involved in modeling this out and the safer bet was larger market (hybrid) and lower investment to bring to market (petroleum).

Last, on John. He IS an enthusiast. When he has time, John does read this site. He doesn’t post, but rest assured he reads this and that is something most car manufacturer presidents can not boast of. Likely some comments in here do frustrate him but more likely (if I were him) I would be frustrated by the lack of direct understanding of the market pressures these guys are under. These are the same people bringing K-PAX racing, Polestar ECUs, etc. Still, they have to work under the confines of a company in a phase of rebuilding that has to choose its battles and plan its growth carefully with the more limited resources is has in an era no longer attached to Ford. In that regard, I think they deserve appreciation. It's a lot easier to armchair it than it is to actually do. There are things I'd do differently too but at the end of the day they're trying very hard and the upward trend in sales suggests they're on the right track. With renewed growth come more resources and more chances to build specialty/enthusiast product.
 
#103 ·
Likely some comments in here do frustrate him but more likely (if I were him) I would be frustrated by the lack of direct understanding of the market pressures these guys are under.
Well I think he (you) has to take this for what it is.....an enthusiast site with some car professionals but many who don't know their ass from the elbow (me). This is an interesting place to lurk because no matter how unrealistic or crazy or unfair we are he gets our honest opinions about their products, where they're going and we're we'd like them to go. For instance I CAN'T BELIEVE the V40 is not coming here. I can already picture all the little yuppy kids in Westport driving one but I have no idea what the hurtles are getting it here. I don't really care though - that's Volvo's job to determine if it's feasible - not mine.

A lot of what I read on here are totally legitimate gripes and concerns that never the less may not be easily fixed even if Mr. Maloney agrees.

That's life!
 
#94 ·
It feels more like if I keep telling my "lover" how much I love her long, brown hair and then she shows up one day with a blonde pixie cut. I ask her why and she says " I thought you would like it". First off, I'm gonna wonder just why she thought I would like it. Then, I'm gonna figure out that it's not really me she's trying to impress, but her "tennis coach".
lol - I enjoyed this
 
#95 ·
Brown haired lover issues aside (I do not think I know enough about analysis to tackle that one), my hope is that some part of my argument will resonate with someone at Volvo. I do not believe that just because Toyota sells a 1,000,000 cars in the US and 10% happen to be hybrids (they ain't selling diesels here) that I buy into the validity of the statement that "hybrids sell better in the USA". Pick a manufacturer that sells both diesels and hybrids - say VW Touareg. Which model is selling more the hybrid or the diesel? Around my neck of the woods the hybrid is easier to find than the diesel. The dealers said that they are having a harder time selling the hybrid than the diesel. Why am I stuck on the Volvo? Because my existing one has been so good. I have not seen such trouble free motoring since my 1998 MB Gwagen and Mercedes quality has taken such a nose dive that I hope to be able to stay with Volvo.
 
#96 ·
But if your experience with Volvo is so good, why can't you be equally satisfied with the small 4-cyl gasoline engine, which is a current Volvo strategy? Why it should be the diesel and nothing else? Remember, that Volvo does not bank its successs on the hybrid. This notion was invented by the SSiers somewhere in the middle of a heated discussion...
 
#97 ·
Guys, I wanted to interject here because I have a lot of interview experience

BUT NOT ENOUGH EXPERIENCE TO RUN A RECORDER.

and also because I've known John Maloney since before the P2 R era. He's a good guy and, though he's ex-Ford, he's one of the most enthusiastic Volvo execs I've ever met... enthusiastic for the Volvo brand. He's owned multiple Rs and is a huge proponent of Volvo's motorsport endeavours from the At Speed Racing days until now. He's made all of that happen.

HE'S MADE EXACTLY WHAT HAPPEN?

So first, an admission. We had to re-create about 3/4 of this conversation as we had a recorder malfunction that was my fault. Remembering the conversation between those of us in the room, we recreated the questions and John and the PR person in the room were patient and kind enough to recreate the answers.

SO MUCH FOR ANY SEMBLANCE OF JOURNALISTIC INTEGRITY. THE INTERVIEWEE AND HIS PR PERSON GET TO RECONSTRUCT THE ANSWERS.

As such it may read a little more manufactured than the natural flow of conversation but the content remained.

On the content, here's the challenge for guys like John. VCNA is effectively an importer. They're a large importer, but an importer.

I THOUGHT THEY WERE A SUBSIDIARY. PART OF THE COMPANY. NOT SOME THIRD PARTY.

I'm not privy to the specific level of say that they have but usually this means high level product strategy takes place in the home market (or maybe China now as well) and that high level strategy such as 4-cylinder hybrids being the new push now is something that likely isn't even a decision for him.

WHAT IS YOUR BASIS FOR SAYING VCNA HAS NO 'INPUT'INTO THIS DECISION. THE US IS VCC'S LARGEST SINGLE MARKET AND THE "IMPORTER''HAS NO SAY. HARD TO BELIEVE. IF YOU ARE CORRECT IT IS DAMMING, THAT VCC WOULD MAKE SUCH DECISIONS WITHOUT INFORMATION FROM THE US MARKET.

Diesel may have been a market decision but also covering the Audi beat I know some of the costs that go into this analysis.

WHAT ARE THE COSTS YOU ARE TALKING ABOUT? BE MORE SPECIFIC.

To run a diesel in America and meet BIN5 requirements you need to do some sort of urea injection. Smaller cars with 4-cylinders may not need this but larger and heavier cars or larger engines do.

ARE YOU SAYING VOLVO IS "LARGER AND HEAVIER" THAN THE AUDI AND VW?

On one hand, the Volvo D5 is one engine that [THEY] could develop and install in all of their product. Even still, there's no guarantee of success and now that they're not at Ford they can't apply economies of scale across large volumes as Audi does.

ARE YOU SUGGESTING AUDI HAS A GUARANTEE OF SUCCESS?

The VW/Audi 3.0 TDI goes across the VW Touareg, Audi Q7

THESE ARE THE LARGE VOLUMES YOU ARE REFERRING TO?

and soon Q5, A8 and maybe A6. The volume associated is much higher and the costs can then easily be pushed out further to even Porsche Cayenne or even more.

Given all of this, diesel may not have been a good decision for Volvo.

WHAT ARE YOU SAYING? ARE YOU AGREEING WITH THE DECISION NOT TO BRING DIESEL TO NA?

We all would like to see it but it probably would have added a very high cost premium to models in which it was offered, which I'm guessing was modeled out and deemed uncompetitive.

WHAT IS THE BASIS FOR YOUR ASSUMPTION THAT IT WOULD BE "VERY HIGH COST PREMIUM" ESPECIALLY SINCE YOU DO NOT EVEN KNOW IF IT WAS MODELED OUT.

That stinks, but it's the basic thing that these guys model out and mull over.

AND WHAT IS YOUR BASIS FOR THAT?

And their job security isn't based on how enthusiastic guys like us are, they're based on sales growth and we're a minority.

Hybrids sell better in the USA and there's no BIN5 requirement on the production of a hybrid. More than likely VCNA and VCC people were involved in modeling this out and the safer bet was larger market (hybrid) and lower investment to bring to market (petroleum).

WHAT WAS THE BASIS FOR YOUR "MORE LIKELY"?

Last, on John. He IS an enthusiast. When he has time, John does read this site. He doesn't post, but rest assured he reads this and that is something most car manufacturer presidents can not boast of. Likely some comments in here do frustrate him but more likely (if I were him) I would be frustrated by the lack of direct understanding of the market pressures these guys are under.

HE HAS A VERY SYMPATHETIC AUDIENCE. IF IT DOESN'T UNDERSTAND, HE HAS NO ONE TO BLAME OTHER THAN HIMSELF.

GIVE HIM ANOTHER INTERVIEW.
 
#106 ·
Guys, I wanted to interject here because I have a lot of interview experience

BUT NOT ENOUGH EXPERIENCE TO RUN A RECORDER.
We run our interview recordings on an older iPod Video hooked up with a Griffin high def mic. It's a not the most state of the art setup, but it is very compact and does quite well at picking up interviewee voices even in loud environments like auto shows. The mic doesn't work on newer iPhones and this show was the first time we'd used it since doing an OS upgrade from Apple. Apparently there are bugs that include it showing that it's recording but not showing the time recorded. I'm an experienced interviewer (check YouTube, Audi of America has used me on a few occasions), but I'm not an expert on the nuance of Apple iPod software upgrades and mistakes happen.

This is a good example though of only having part of the picture and drawing a very critical yet not terribly informed conclusion.

and also because I've known John Maloney since before the P2 R era. He's a good guy and, though he's ex-Ford, he's one of the most enthusiastic Volvo execs I've ever met... enthusiastic for the Volvo brand. He's owned multiple Rs and is a huge proponent of Volvo's motorsport endeavours from the At Speed Racing days until now. He's made all of that happen.

HE'S MADE EXACTLY WHAT HAPPEN?
Well I'm not privvy to all of his daily routine or his resume at Volvo so I'll keep it short to what I know that effects enthusiasts. Placement of Volvo a number of years at SEMA including support for the then new to the market Evolve cars. The red SEMA car that year was John's daily driver. Product planning was under him while he was at his marketing gig, so manual transmission P2 Rs in a market where manual gearboxes take a leap of faith. Ditto for T5 AWD MT6 S40/V50. Need more examples?

So first, an admission. We had to re-create about 3/4 of this conversation as we had a recorder malfunction that was my fault. Remembering the conversation between those of us in the room, we recreated the questions and John and the PR person in the room were patient and kind enough to recreate the answers.

SO MUCH FOR ANY SEMBLANCE OF JOURNALISTIC INTEGRITY. THE INTERVIEWEE AND HIS PR PERSON GET TO RECONSTRUCT THE ANSWERS.
This is Swedespeed... a Volvo enthusiast website. I'm not Edward R. Morrow and doubt we're in the running for expose of the year here. We covered what we covered and we went back and rebuilt. We'd lost the diesel discussion and a lot of product talk and thought it was a shame not to run it. The folks at Volvo did an admirable job helping us recreate it and since two of us from this site were in the room, we had a pretty good memory of what was discussed. If you don't like it you can go find another website that provides this sort of access and coverage of the Volvo brand.

As such it may read a little more manufactured than the natural flow of conversation but the content remained.

On the content, here's the challenge for guys like John. VCNA is effectively an importer. They're a large importer, but an importer.

I THOUGHT THEY WERE A SUBSIDIARY. PART OF THE COMPANY. NOT SOME THIRD PARTY.
I think we're debating terminology here. I work with U.S. "subsidiaries" of car companies daily, specifically Volvo, Audi and VW. More of their jobs are about monitoring market trends, demands and living by market-specific regulations. It's rare that an import market dictates product at a high level but it does happen. This has always been a struggle though and even in days when the USA was THE largest market and the home market to the parent company (then Ford). Regardless, I don't think your use of a different term than mine really signifies anything revealing.

I'm not privy to the specific level of say that they have but usually this means high level product strategy takes place in the home market (or maybe China now as well) and that high level strategy such as 4-cylinder hybrids being the new push now is something that likely isn't even a decision for him.

WHAT IS YOUR BASIS FOR SAYING VCNA HAS NO 'INPUT'INTO THIS DECISION. THE US IS VCC'S LARGEST SINGLE MARKET AND THE "IMPORTER''HAS NO SAY. HARD TO BELIEVE. IF YOU ARE CORRECT IT IS DAMMING, THAT VCC WOULD MAKE SUCH DECISIONS WITHOUT INFORMATION FROM THE US MARKET.
You're talking in dramatic opposites here. I'm saying they likely (because I don't know for sure) don't have much say in that high level strategy. You're suggesting there is no research or insight into the North American market as a result. Given Doug Speck just took that post in Gothenburg and Jacoby (who I also have worked with at VW) isn't familiar with the North American market when he ran Volkswagen America for several years in his previous job suggests they've got a pretty good read on North America.

Diesel may have been a market decision but also covering the Audi beat I know some of the costs that go into this analysis.

WHAT ARE THE COSTS YOU ARE TALKING ABOUT? BE MORE SPECIFIC.
Google BIN 5. I'm not an engineer so will leave that to the search engine but basically this is an exhaust particulate standard set in place for the U.S. market. Small light cars with small engines (Jetta TDI, Audi A3 TDI) meet this without urea but when you put that engine under load in a heavier car or you introduce a larger engine such as the VW/Audi 3.0 TDI in the touareg and Audi Q7 then you need to develop a whole urea injection system including tank, refill system, support at dealerships for re-fills and servicings, etc. This is a considerable cost, even for the larger Volkswagen Group who is pushing the costs of the development of this system out over many models for higher volumes and thus higher economies of scale. Currently this includes Touareg TDI and Q7 TDI, but it will also soon include A6, A8, Q5 and Porsche Cayenne. The Volkswagen Group has any number of TDI engines including a cool 4.2 TDI V8, an exotic V12 TDI, a new 3.0 V6 TDI biturbo etc. and none of these have come to the States because of the additional cost of development of the system unique to each engine. I don't have a dollar value and likely that's not something any of them care to share.

So now you're Volvo and you're considering the D5. You need to account for that and then plan it into models. You could put it in the XC60 and S60, your two highest volume models, but you have a hybrid drivetrain on the way that is likely more fuel efficient and does not require the urea injection system nor even federalization of an (old) new-to-us engine. A new 4cyl turbo GDI petrol will need to be federalized but volumes can be pushed out over both the hybrids and all of the petrols that will use it. This means less federalization costs and less complexity in the parts distribution system.

There are more details but this is getting a bit long and I think I've adequately made the point.

To run a diesel in America and meet BIN5 requirements you need to do some sort of urea injection. Smaller cars with 4-cylinders may not need this but larger and heavier cars or larger engines do.

ARE YOU SAYING VOLVO IS "LARGER AND HEAVIER" THAN THE AUDI AND VW?
I'm not sure where it weighs in but I suspect so. My understanding of A4 with the 2.0 TDI (in the planning for Audi of America) was close to maybe needing it due to the added weight of its installation in the larger A4 chassis. I don't recall the result in this case, whether they were able to go without it or not. That said, if the smaller displacement 2.0 TDI in the A4 fwd (larger but also lighter than the S60) was borderline then most likely a D5 in an S60, XC60, XC70, S80 or XC90 would require it.

On one hand, the Volvo D5 is one engine that [THEY] could develop and install in all of their product. Even still, there's no guarantee of success and now that they're not at Ford they can't apply economies of scale across large volumes as Audi does.

ARE YOU SUGGESTING AUDI HAS A GUARANTEE OF SUCCESS?
Yes and no. Volkswagen had already been selling diesels in the US before BIN5. They had an existing clientele for Jetta, Golf and Touareg. It was thus easier to model out the product volumes. BIN5 required them to cut back variants and drop the old PD V10 TDI. They narrowed it down to just the 3.0 TDI and even the Cayenne will be limited to this number even though a more compelling enthusiast Cayenne or Q7 would have the 4.2 TDI or the V12 TDI. The market just won't bare that in the USA and 3.0 TDI, again, was more easy to plan given the existing VW business.

So what I'm saying is that if Volvo and Ford worked together to federalize a diesel (D5 or whatever) for say the Focus, the Transit Connect, the new Escape, even the Explorer, then these two companies could spread the cost out over much higher volumes. Volvo no longer has this luxury though since they're now on their own.

The VW/Audi 3.0 TDI goes across the VW Touareg, Audi Q7

THESE ARE THE LARGE VOLUMES YOU ARE REFERRING TO?
As compared to what? They are volumes. Volvo has not had diesel product in market in many, many years. They'd be starting anew without any existing business as VW had. This involves risk and when your job revolves around sales success, you minimize risk and go with what is a better seller in market. I suspect you, me and maybe John might prefer a D5... or maybe even a D5 hybrid (might be cool), but the market won't bear the premium and the market has a higher volume track record in hybrids. That's unfortunately the reality that these guys face. Lack of happiness by you or by me is less a measure of success, unlike sales volume which is critical.

WHAT ARE YOU SAYING? ARE YOU AGREEING WITH THE DECISION NOT TO BRING DIESEL TO NA?
That's a loaded question. I own a Touareg TDI. I know where my tastes are and I'd love an XC60 D5 R-design. That's my taste. I also work in the industry and I know where the market is going. I know the pressures they're under and the resources they have at hand. If my job security were based on moving product and bringing volume back so the brand has the luxury of then later doing niche models... then I'd go hybrid as well. I have the luxury of being simply an enthusiast though, and as such I prefer R cars and diesels.... even better diesel R cars. ;)

WHAT IS THE BASIS FOR YOUR ASSUMPTION THAT IT WOULD BE "VERY HIGH COST PREMIUM" ESPECIALLY SINCE YOU DO NOT EVEN KNOW IF IT WAS MODELED OUT.
I don't know for sure that it was modeled but the answer is pretty obvious. I'm sure they looked at what they had on hand and modeled costs of further developing this versus developing other new solutions. You can look at the premium of say a Touareg 3.0 TDI vs. a Touareg 3.6 V6 petrol in the market and compare like versus like... say mid-level Lux models (what I have). Now add a bit for development and also OE supplier purchasing costs to that since volume would be lower for Volvo. There's your basic estimation of a premium. So add that to the XC60 or XC90 you might buy. How much more volume do you think that would bring Volvo? Now compare the number of diesels in the given segment versus hybrids.

That stinks, but it's the basic thing that these guys model out and mull over.

AND WHAT IS YOUR BASIS FOR THAT?
I actually really identify with the product guys. They (and also the designers) are usually the most easily identified car enthusiasts in the room at the events we attend. John managed product directly when he was in his marketing position, and others like Art Battaglia directly in product planning are likewise car guys. Same goes for the product planners at Audi and VW with whom I also interact. They love to do it, hands on, but to be good at what they do they need to recognize and work around the challenges.

Hybrids sell better in the USA and there's no BIN5 requirement on the production of a hybrid. More than likely VCNA and VCC people were involved in modeling this out and the safer bet was larger market (hybrid) and lower investment to bring to market (petroleum).

WHAT WAS THE BASIS FOR YOUR "MORE LIKELY"?[/b]

I'm speculating. It's an educated guess. No one's told me anything directly in this matter but I've got 10 years in the business of automotive journalism.

Last, on John. He IS an enthusiast. When he has time, John does read this site. He doesn't post, but rest assured he reads this and that is something most car manufacturer presidents can not boast of. Likely some comments in here do frustrate him but more likely (if I were him) I would be frustrated by the lack of direct understanding of the market pressures these guys are under.

HE HAS A VERY SYMPATHETIC AUDIENCE. IF IT DOESN'T UNDERSTAND, HE HAS NO ONE TO BLAME OTHER THAN HIMSELF.

GIVE HIM ANOTHER INTERVIEW.
I'd argue he has a much less sympathetic audience here... like minded in enthusiasm but not in viewpoint. This audience is extremely enthusiastic and this audience has very strong ideas of what the Volvo brand means to them. The Volvo brand is dear to pretty much everyone on here and as such deviation from what makes it great to you or to me will draw often passionate criticism. If I ran Volvo I'd make my own changes, rebadge R-design to R (and fit them with Brembos), push shifter paddles on autos across the line, add DSG manumatics and implement XWD torque vectoring from Haldex. I'd bring more wagons. I'd bring diesels. I'd bet that that would make a lot of people on here very happy because I'm like minded... but I'd also spend very limited resources on cars that don't sell in high volumes and I'd probably get fired as a result. Therein lies the disconnect. I understand the challenges he's facing and I believe he deserves the respect and benefit of the doubt, understanding he can't just build the cars he'd love to build. They're a business and long-term success of Volvo means more specialty product in the end.

I experienced something similar at Audi. There's been massive simplification of engines and transmissions, also models. Wagons are out and Audi enthusiasts aren't happy about it. Manual transmissions have been dialled back. Again, enthusiasts complained. However, sales have turned around and are now growing into record territory and as a result more diesels are coming and more high-performance S and RS cars are coming. Smart planning pays dividends.
 
#98 ·
Why not a 4 cylinder

As you may have noticed I am looking at BIG vehicles. MB GL, Touareg, S class, and XC90. I want AWD and good range and mileage in a large vehicle that swallows 1500 to 1800 mile trips easily. It needs to be able to tow (I own and need to sometimes tow a horse). Seriously, do you think the 4 cylinders are going to be able to do this? My V8 can. A diesel could. Please remember that I am not looking at the c30's and the s60's. I am talking specifically about the big vehicles that Volvo makes - XC70 and XC90. I am fine with whatever they want to put in the smaller vehicles but I bought my xc90 because it is big and powerful and swallows highways very quietly and comfortably. I did not buy the Touareg because the ride was a little too stiff (personal preference) and I could not stand the ergonomics of the electronics. Volvo's 2010 system was much better for me. I just do not understand the hybrid/small 4 cylinder strategy in a big premium vehicle. It did not work for the 940 and it will not work for an xc90/xc70/s80. Especially in the US where the distances are not like driving from Boston to New York for multistate travel. This country is bigger and the highways much longer than in Europe. Ergo....DIESEL. JMHO.
 
#104 ·
As you may have noticed I am looking at BIG vehicles. MB GL, Touareg, S class, and XC90. I want AWD and good range and mileage in a large vehicle that swallows 1500 to 1800 mile trips easily. It needs to be able to tow (I own and need to sometimes tow a horse). Seriously, do you think the 4 cylinders are going to be able to do this? My V8 can. A diesel could. Please remember that I am not looking at the c30's and the s60's. I am talking specifically about the big vehicles that Volvo makes - XC70 and XC90. I am fine with whatever they want to put in the smaller vehicles but I bought my xc90 because it is big and powerful and swallows highways very quietly and comfortably. I did not buy the Touareg because the ride was a little too stiff (personal preference) and I could not stand the ergonomics of the electronics. Volvo's 2010 system was much better for me. I just do not understand the hybrid/small 4 cylinder strategy in a big premium vehicle. It did not work for the 940 and it will not work for an xc90/xc70/s80. Especially in the US where the distances are not like driving from Boston to New York for multistate travel. This country is bigger and the highways much longer than in Europe. Ergo....DIESEL. JMHO.
As you might notice, I drive large vehicles exclusively too. To answer your question directly - yes, I am absolutely sure that 250HP, 250 ft-lb 4-cyl turbo gas engine can do everything that you have mentioned with competence...the only thing that would be missing - high gasoline bill...

I had 2.5T (207HP) before and I have V8 now...there is nothing today that I could not do before...and both, my wife and I drive a lot - 20K per year on each of 2 vehicles we drive...

Lastly, with the vehicles of this size and weight, the TDI has no real advantage...as I shown a few comments back - the Q7 TDI has exact same mileage as the current XC90...and that is with much more expensive fuel...so, unless you are OK with the smallish D5 in Volvo that has much worse performance than the new 4-cyl line, and is much less suitable to your needs, there is no any advantage of having diesel, besides the word "diesel" itself...

Yes, no, maybe?
 
#100 ·
One set of issues with Volvo that the interview didn't addressed and nobody is asking is

1) what is being done about the molasses pace that Volvo works at
2) the problem that Volvo has admitted itself that it's too hands on designing too many of their own parts
3) That models just don't get updates frequently enough.

Whatever path Volvo chooses, I hope that should it not go according to Volvo's plan, that Volvo can adapt a lot quicker than it seems capable of doing today.
 
#108 ·
One set of issues with Volvo that the interview didn't addressed and nobody is asking is

1) what is being done about the molasses pace that Volvo works at
Molasses? R&D is working very, very hard

3) That models just don't get updates frequently enough.
The current plan is major refresh every 3 or 4 years, replacement every 7 years. I think this is a very good plan and in stark contrast of past practices.

Whatever path Volvo chooses, I hope that should it not go according to Volvo's plan, that Volvo can adapt a lot quicker than it seems capable of doing today.
And it has...don't forget: until a little over a year ago, it was owned by someone else and there were no solid plans looking down the road.
 
#101 ·
For those that are curious about hybrid vs diesel sales, enjoy:

http://www.hybridcars.com/news/december-2011-dashboard-sales-still-climbing-35093.html

Looks like the VW Tourag diesel outsold the hybrid 9 to 1. But still, those are some low sales for the diesel. With those numbers, is it worth it to have an XC90 diesel? Seems like all SUV diesel sales are very low.

The Prius just outsells everything by such a ridiculous margin. The next closest seller, still getting beat almost 3 to 1, was the VW Jetta diesel.

For the record, I don't really care whether they all of a sudden choose to bring diesel, or stick with the 4 cyl plan, or bring over a hybrid. However, I believe they should think long and hard if their only plan besides 4cyl is to bring over a hybrid with a premium north of $10k.
 
#105 ·
Not sure I agree

But I think time will tell. It does not look like I will get to try the diesel in the US so I will likely be trying some behemoth with a turbo 4 in the future. Will see what it is like to pull a horse trailer to southern Jersey for a show. Gotta be honest that I really do not think this is going to be a good experience. Please also note that the mileage on the Touareg was better than the Audi. Not sure why except the usual weight and gearing. Also do not think the torque will suffice BUT I sure hope you are right because I will not have any gratification in being right.
 
#107 ·
Thank you for the prompt, courteous, thoughtful, detailed reply. As someone observed the quality of the discussion here is like no where else. I could not agree with your penultimate paragraph more. I hope you understand my frustration was with Maloney and not the Forum. Good luck with the new iOS.
 
#110 ·
Reading about the apparent inability of VCNA to influence product reminded me of when I sold VWs about 30 years ago.

A sales manager told me he had been told by VW factory reps that since the US was only 10% of VWs worldwide market, it would only recieve 10% of management's attention.

I replied that an attitude like that ensured that VW's US business would always be 10% of their total business.

30 years later, VW now offers US specific Golfs, Jettas and Passats, all of which are selling very well. Meanwhile, Volvo seems to be emulating the former VW business plan. So sad.
 
#112 ·
VW has come off of banner years and has just opened a factory that was years in the making. Volvo has to come back a bit. VW didn't just get there. Remember 1993? They almost pulled out of the market. It takes years of effort and Volvo just came out of a period of being starved of development money to keep the business most profitable in order to help tender the sale. They were in stasis and now they need to rebuild. I don't think it's that they don't care and I think I explained why America gets plenty of attention in Gothenburg. Still, I don't think it's realistic for John and his team to say "We want X" without making a very good case for it and it just happening. That's not the environment in which Volvo currently finds itself.
 
#113 ·
Please do not misunderstand my appreciation for scoring this interview. It was helpful in understanding where Volvo US is and what we might expect. I also understand the issue of emerging as a stronger and healthier Volvo. Here is the disconnect. I totally respect and would feel more comfortable if someone from Volvo corporate said "we might like to have a diesel in the market now" but we can not afford it. Instead what I have gotten is that is not the direction because we are spending many R&D dollars on something else and (this is the part that REALLY scares me) Americans do not buy or want diesels. Yannis politely suggests the different direction issue which, though I may not agree with it, very clearly describes the overall direction Volvo US is going. I get very queasy when the market in which I am living is mischaracterized and I see other manufacturers eating Volvo's lunch. Just admit that we (Volvo) can not afford the diesel (I think saying that the dealers would need to retrain techs is a cop out also). Honesty is always best whereas misrepresenting the customer makes some of us wonder who is driving the boat.
 
#114 ·
Thanks. I'm not sure it's a matter of "we can't afford it" so much as it's a picking and choosing on a limited budget. Knowing what I know about the market (not just those on here), I see their strategy. If they went diesel and R models, that would be very good for Swedespeed business and all those who hang out and/or advertise on here. Still, I understand their viewpoint and it seems like a solid approach for their long-term health.
 
#115 ·
Geo. This is where some of us have a fundamental disagreement with VCC/VCNA/VC,US. I for one think Volvo is going to get its brains beat out trying to sell volume models. They are putting themselves up against Toyota, Nissan, VW, etc. Its a recipe for disaster. Volvo simply cannot match the economies of scale that the big boys possess. Marchione (who I think is the sharpest knife in the drawer) figures you need 5 million units to survive, and he is doing it. Fiat picked up Chrysler for nothing really and has turned it around. Marchione is going to do it. I and maybe a few others think a better business plan for Volvo is the niche car, move upscale, do interesting cars for enthusiasts in NA, and Europeans who have a different taste in cars, and be happy with decent margins on a smaller volume. But opinions make markets. We shall see if Volvo makes it in NA on its limited offerings (I suppose it will, but that depends on how long until the new stuff gets here and the price of gas when it does), and then we will see if it survives in NA selling 4 cylinder electrically assisted models (that I am less sanguine about.)

Going back to that other thread on customer retention. I think that is very important. Volvo is destroying its base. This is a market where people can become attached to their brand, and once you lose a customer it may be gone for a very long time.
 
#116 · (Edited)
Going back to that other thread on customer retention. I think that is very important. Volvo is destroying its base. This is a market where people can become attached to their brand, and once you lose a customer it may be gone for a very long time.
I'm gone as a Volvo customer, although I suppose I was never really a true "Volvo" customer even though I bought two Volvos eleven years ago and the description of Volvo's target customer in my wife's marketing book 10 years ago described us to a "T". Now that other cars are available with Head Curtain airbags and the safety gear Volvo pioneered, IMHO Volvo no longer is a market leader in anything (style, panache, performance, reliability, fuel economy, or safety) The talk of the gas 4-cyl eco-boost makes me just put Volvo out of the running altogether when I ponder my future vehicle purchases.

But that's just me as I tend to think about how the car will be of service to me not just in the next year, but 10 years down the road. And I understand most buyers don't think that far ahead.

Oh well.

So far my plan is holding out: If the S60 dies in the next 4 years I get myself a Rabbit TDI; if I can hold out until the car is 15 years old I'll just go all-electric and not bother with the hybrid of any type. Volvo has nothing in the pipeline that I can think of that would change that plan.
 
#117 ·
George - Thank you for your time and efforts and your explanation. I will say that I think it would have been appropriate to have included a disclaimer regarding the technical difficulties as part of the interview recreation. I think it does answer much of the concern I had about the tone of the interview.

At the end of the day, I think the most frustrating thing for me has been having guests repeatedly ask - unprompted - for a product that Volvo makes (V40, V60, V70T6 - ie. without all that plastic crap on the sides), but that I don't have access to. As for the Diesel question, I get that it would be an expensive gamble. My opinion is that the Volvo customer is eager to buy a diesel and will seek it out. I understand that Volvo is "Skipping" Diesel and jumping forward to the next, "next big thing" - a truly useful and versitile hybrid. That doesn't make waiting any easier.

Mr. Maloney, if you're out there - please fight to get us a V40 in North America. And if you do, don't worry about all of the other similar cars that in the class. Just advertise the hell out of the thing with the attitude that Volvo invented safety and versatility in a durable package. "Volvo - now in fun size" You don't even have to pay me for that one. :)
 
#120 ·
Mr. Maloney, if you're out there - please fight to get us a V40 in North America. And if you do, don't worry about all of the other similar cars that in the class. Just advertise the hell out of the thing with the attitude that Volvo invented safety and versatility in a durable package. "Volvo - now in fun size" You don't even have to pay me for that one. :)
At least stock you with the first state-side batch ;)
 
#125 ·
George,

Valid point; however, if gas goes to $5/gallon, diesel prices are not going to stay where they are right now ($4.65/gallon in the L.A. area, based on what I have been seeing)...
 
#126 ·
The diesel is going to be more expensive than the premium gas in US for quite some time. Unlike Europe, the cost benefits for the diesels here are much smaller or non-existent. Smallish frugal forced ignition engines are much better proposition.


And, unlike Europe, where diesel fuel is the best utilization of the crude oil, volume wise, the situation here is different. The gasoline is the best utilization of the crude oil in our refining process.
 
#128 ·
Woohoo! My Tesla stock has nearly doubled after I bought it a week after the IPO at 17.25. Now that's a car I'd wait for.

Volvo gasoline 4-bangers? Nah.

After all the hype Ford trucks running Ecoboost don't seem to be getting that much better mileage than their NA cousins, albeit with 2 less cylinders on the equivalent hp-output powerplant. Gee, I wonder if it's because thermodynamic efficiency of an IC engine is proportional to compression ratio? ( Y'know, the basic physics thing). So unless Volvo's 4-bangers are raising compression ratios to match diesels' I'm suspicious that for the same power output (read: lead-footed drivers) the new 4-bangers won't be that much more efficient than what's out there right now. Until Volvo proves they can get the same efficiency I'll just take Maloney's talk as nothing but marketing hype.

So: Would I buy Volvo stock? Bwhahahahahahahaha!!!!!!
 
#129 ·
Woohoo! My Tesla stock has nearly doubled after I bought it a week after the IPO at 17.25. Now that's a car I'd wait for.

Volvo gasoline 4-bangers? Nah.

After all the hype Ford trucks running Ecoboost don't seem to be getting that much better mileage than their NA cousins, albeit with 2 less cylinders on the equivalent hp-output powerplant. Gee, I wonder if it's because thermodynamic efficiency of an IC engine is proportional to compression ratio? ( Y'know, the basic physics thing). So unless Volvo's 4-bangers are raising compression ratios to match diesels' I'm suspicious that for the same power output (read: lead-footed drivers) the new 4-bangers won't be that much more efficient than what's out there right now. Until Volvo proves they can get the same efficiency I'll just take Maloney's talk as nothing but marketing hype.

So: Would I buy Volvo stock? Bwhahahahahahahaha!!!!!!
I do not work for JPL, but...

thermal efficiency is NOT proportional to the compression ratio...it is related to the compression ratio, i.e. the higher a compression the higher the thermal efficiency, but...it is FAR from proportional, and since the biggest lost is through the exhaust and watter cooling, which are NOT directly related to the compression ratio, the statement above is not really the basic physics...

Better design of water cooling, low friction cylinder linings, ceramic materials that allow to run engines hotter, etc. improve the overall efficiency...the government tests do not lie...under the same conditions - modern smaller engines are more frugal, while have the same torque and HP as older bigger less efficient engines...
 
#130 ·
Nope, it's compression ratio:

The Otto cycle is the name for the cycle used in spark-ignition internal combustion engines such as gasoline and hydrogen fueled automobile engines. Its theoretical efficiency depends on the compression ratio r of the engine and the specific heat ratio γ of the gas in the combustion chamber.[4]

\eta_{th} = 1 - \frac{1}{r^{\gamma-1}}\,
Hence, to improve efficiency, increase the compression ratio. However the compression ratio is limited by the need to prevent the uncontrolled combustion known as knocking. The specific heat ratio of the air-fuel mixture γ varies somewhat with the fuel, but is generally close to the air value of 1.4. This standard value is usually used in all the engine cycle equations below, and when this approximation is used the cycle is called an air-standard cycle.
See http://en.wikipedia.org/wiki/Thermal_efficiency

For air, gamma is a constant, so it's all about the compression ratio.
 
#131 · (Edited)
Nope, it's compression ratio:

See http://en.wikipedia.org/wiki/Thermal_efficiency

For air, gamma is a constant, so it's all about the compression ratio.
I did not argue that... but, first it is NOT proportional in a any given shape or form, even considering the air value, which is a core of your original comment...one engine with the same compression ratio can have better performance than the other...and the THEORETICAL thermal efficiency is very different from the actual performance, since, AGAIN, as I said, the biggest draws on performance are the heat lost from the exhaust and from the water cooling. Neither of which is related to the compression...

And by the way...if you waould just read besides the very first formula you will discover that...

"The Diesel cycle is less efficient than the Otto cycle when using the same compression ratio. However, practical Diesel engines are 30% - 35% more efficient than gasoline engines.[5] This is because, since the fuel is not introduced to the combustion chamber until it is required for ignition, the compression ratio is not limited by the need to avoid knocking, so higher ratios are used than in spark ignition engines."

...but I do not work for JPL...
 
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