The widely followed J.D. Power 2017 U.S. Initial Quality Study was released recently. Among the 33 brands measured, Volvo ranked 31st. It is a stinging rebuke for a company that is trying to position itself as a luxury alternative to BMW, Mercedes, Lexus and Audi.
Volvo really cannot be positioned as a turnaround, even if its quality ratings were strong. Its sales through the first five months of the year were down 4.5% to 26,802. At the current rate, it sells only 6,000 cars a month in the United States. Most of its sales come from three models. About 20% are the S60 mid-priced sedan, nearly 30% are the XC60 sport utility vehicle and 35% are the new XC90. The XC90 is a luxury SUV with a starting price of $45,750, which can rise well over $100,000 for the “Excellence” model. Perhaps Volvo should not keep the excellence badge for just one model.
Volvo’s dealer network, marketing budget and small model lineup cannot possibly keep up with juggernauts like BMW and Mercedes. Each has model lineups that are many times Volvo’s. Each has been among the modest widely regarded, high-quality auto brands in the United States.
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Volvo is currently owned by Zhejiang Geely Holding of China. It is one of the rare forays of a Chinese car company into the U.S. market, the second largest in the world. So far, the effort has not been very successful. And that has no sign of changing, and it cannot if the company’s quality rankings remain poor.
Initial quality in this iconic study was measured by the number of problems experienced per 100 vehicles during the first 90 days of ownership, with a lower score reflecting higher quality. In this year’s study, quality improved across seven of the eight categories measured, with 27 of the 33 brands in the study improving their quality compared with 2016.
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