Volvo Cars of North America:

Volvo Growth Strategy – New Management, New Strategy, New Drive-E Powertrains, New Vehicles

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Volvo Growth Strategy: Tony Nicolosi, new President and CEO of Volvo Cars of North America says 90% of the senior management of VCNA is new since he took over in October 2013. Volvo’s marketing strategy is also going to change with the arrival in January of Bodil Eriksson as executive vice president of marketing and new advertising agency Grey London starting in March. Nicolosi says Volvo will return to its roots emphasizing safety, the environment and the family. The marketing budget for 2014 is bigger by about 50% but its emphasis will shift away from television to digital messaging.

Prior to becoming head of VCNA, Nicolosi was head of Volvo Finance in the USA, so he is very familiar with the leasing game. About 42% of Volvos are leased, well short of the leasing penetration of Audi, BMW or Mercedes. Going forward, Volvo’s lease penetration should increase with more concentration on more car for the payment and regular replacement. This will give Volvo dealers the first shot at putting off-lease customers into a new Volvo.


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California Loses More Car Operations

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On Friday, March 7, two announcements were made that impact the Southern California car culture and, to some extent, the global auto industry.
Volvo Cars of North America Returns to Rockleigh Headquarters
The first was that Volvo Cars of North America is returning to its former headquarters in Rockleigh, New Jersey at the foot of the Tappan Zee Bridge. Beautiful location and much closer to Sweden, but we can’t help but wonder how the Volvo mindset in the USA will change with a New Jersey perspective rather than one from California? But, this does make sense.

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Jaguar and Land Rover Likely Will Move to Jag’s Old HQ in Mahwah
In due time, Jaguar and Land Rover locations will very likely move from Irvine, California back to Jaguar’s old HQ in Mahway, New Jersey. One veteran Land Rover manager quipped, “Well, I’ve worked for Land Rover through four owners. One more (Tata) won’t be too much different.”
This means that Ford’s Premier Automotive Group headquarters building in Irvine will be pretty empty except for some Ford regional and PR offices. This is also where Ford has some advanced design activities.
Chrysler Pacifica to Shut Down, Operations Relocated to Auburn Hills
The second announcement was that Chrysler is closing its Chrysler Pacifica operation in Carlsbad. Used as an advanced concept design center and monitoring operation, several Chrysler show cars were designed at Chrysler Pacifica and in the heyday, were fabricated by Metalcrafters in Fountain Valley. Here is Chrysler’s blurb on the demise of Pacifica: “Increasingly, we are leveraging resources worldwide, forming new joint ventures and alliances and consolidating operations in order to better achieve global balance and manage fixed costs. These moves are designed to help Chrysler become a more globally focused manufacturer, with design, engineering, sourcing and a local presence to serve local customers.
As such, we are closing the Pacifica Advance Product Design Center, consolidating the Advance Design function in Auburn Hills. Advance Design remains an integral part of our future design efforts, led by Trevor Creed, Senior Vice President — Design.
These changes set the stage for Chrysler’s future global growth efforts, which also include our intent to establish global expertise in design, engineering and sourcing through centers of excellence. These actions will help the Company meet its long-term globalization goals.”
Expect Many Staffers to Refuse to Move – Nissan’s Experience
Volvo, Chcysler Pacifica and soon Jaguar Land Rover will lose valuable and experienced staff who will refuse to relocate out of Southern California. This is what happened when Nissan North America moved from Gardena to Nashville, Tennessee in 2006. Less than 30% of their folks went with them and it has been turmoil ever sense.
All of these operations (with the exception of Nissan North America which was “born” in Southern California) moved to Southern California to be part of the most trend-setting area in the USA and arguably the tip of the spear in advanced automotive design in the world. In the case of PAG, it can be argued that staffers spent too much time at their desks to really benefit from being here. But designers need to breathe the air and see the colors and vibrancy of the area. Viewing the world as a designer in Detroit is, simply, different.


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