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Volvo Cars in Japan Approaching
the year 2002
24 October 2001, 02:00 CET
In 2000, the automobile market in Japan showed improved results over the previous
year for the first time in four years, in spite of Japan’s prolonged economic
stagnation. Further signs of recovery, although slight, have been observed in
the market this year. The number of Volvo cars sold has steadily increased, aided
by the successive introduction of new models since last year, with the entry of
the ‘New V70’ and the ‘Cross Country’ in 2000, and the ‘S60’
in 2001. Volvo has recorded the highest growth rate of 9.5% among the top five
companies in the imported car market, in a performance befitting the beginning
of the 21st century.
Trends in the Japanese Economy
In the Japanese economy, gross domestic product (GDP) for the April-June 2001
quarter showed a 3.2% decrease in the annual rate. The Nikkei average stock price,
which in May registered its lowest level since the collapse of Japan’s ‘bubble’
asset-inflated economy, finally dropped below the symbolic 10,000 yen level for
the first time in 17 years on the day following the September 11 terrorist attacks
in the United States. This severe economic environment resulted in deflation and
deterioration of corporate performance. The rate of unemployment has exceeded
a record high of 5% since July, and beneficiaries of unemployment allowance numbered
1,167,000 in August, the highest ever. Consumption expenditure for each household
has declined below the levels of previous years continuously for the last five
years, spotlighting the severe situation of the Japanese economy.
Car Sales in Japan, 2000-2001
The number of new cars sold in Japan, excluding mini cars and including imported
cars, was 2,978,607 in 2000. This was a 2.1% increase over the previous year,
the first increase in four years. The number of new cars sold between January
and September 2001 was 2,325,984, a 2.9% increase over the same period of the
previous year, signifying that the decline appears to have bottomed out.
The number of new imported passenger cars sold registered a record high of 400,000
in 1996, but then declined for two years in succession due to an increase in the
consumption tax rate and a deterioration of the market environment. The number
of imported cars sold in 2000 was 247,766 (a 0.9% increase over the previous year)
showing a trend towards leveling off. Sales so far this year (January-September
2001) have increased slightly to 192,497 (a 3.8% increase over the previous year)
showing signs of recovery reflecting the efforts of manufacturers to introduce
new models and conduct various sales promotion activities.
Volvo Car Sales in Japan
In spite of the severe economic environment in 2000, the registration of new Volvo
cars increased 9.6% over the previous year to 15,566, showing signs of early recovery
in the cooled-down market for imported cars. This was partly due to the addition
of new models such as the V70 and Cross Country to Volvo’s Estate model lineup
which maintained a steady sales performance. In particular, the V70 came in top
and V40 was 4th in sales performance in the imported Estate car market, establishing
Volvo’s position as the top brand in this segment.
Volvo introduced its S60 ‘4-door sports saloon’ in January 2001. This
model is maintaining favorable sales results even better than initially expected
in the highly competitive high-class saloon market, while Volvo’s estate
models are also realizing steady sales. As a result of the introduction of the
S60, the ‘saloon-versus-Estate’ ratio which was ‘16% to 84%’
in 2000 changed to ‘25% to 75%’ in June 2001. The registration of new
Volvo cars between January and September 2001 showed a favorable increase of 9.5%
over the same term in the previous year to 12,702 cars, ranking Volvo fourth overall,
the only non-German manufacturer among the top five imported car companies in
Japan.
Volvo Sales Scenario
for 2002
Volvo Cars Japan intends to realize three targets; to become the No. 1 “premium
brand,” to acquire the top position in ‘customer satisfaction (CS)’
and to attain growth in profitability. Volvo is developing its business activities
in Japan while placing importance on four keywords that constitute the basis for
attaining these targets; namely, “products,” “brand,” “network”
and “people.”
For “products,” Volvo aims to further expand its sales in the saloon
field with which the company achieved great success in 2001. To do this they will
add the S60 AWD model, equipped with newly developed electronically controlled
AWD (all wheel drive), to the S60 Series that was successful in acquiring many
new customers. Furthermore, Volvo will introduce the S40 Nordic Special and V40
Nordic Special equipped with more powerful engines and a variety of special equipment
in the 40 Series in an aim to attract customers from competing companies. In addition,
all Volvo V70 and S60 models in Japan achieved JLEV emission control standards-
the first imported vehicles to do so.
Volvo is planning to expand its “network” that currently consists of
around 140 sales outlets to more than 160 outlets by 2004. The company began a
CI introduction program last year not only to expand the number of outlets in
the network but also to offer quality services suitable for a premium brand consistently
throughout Japan. In addition, Volvo dealers that satisfy the standards laid down
by Volvo concerning the exclusive sale of Volvo cars, the number of staff, and
facilities, will be permitted to use the name of “Volvo Cars” which
was previously only allowed for branch offices. Many dealers are now renewing
their outlets for this purpose, and a total of 108 outlets had been renewed by
September 2001.
For its “brand,” Volvo will make efforts to further enhance brand value
by boosting its ‘soft’ services in order to offer a variety of high
value-added services to Volvo owners as well as to reinforce marketing activities.
The company started a service program called the “Volvo Anshin (peace of
mind) Package” that allows customers to own a Volvo car without worry by
offering them extra low interest loans, the “Volvo Service Passport”
which offers free checking and servicing four times in three years and a 24-hour
roadside assistance service, and general assurance for three years or 60,000 km.
Lastly, for its “people,” Volvo is offering various educational programs
appropriate for each job level in an aim that all staff engaged in Volvo’s
business should be able to offer a “true premium experience” to customers.
The company is providing a managerial education program known as the “DBI
(Dealer Business Institute)” to dealer managements and making efforts to
enhance customer satisfaction by reinforcing the managerial structures of dealers.
At the same time, Volvo is making efforts to improve and unify the quality of
its dealers through its “Volvo Dealer Navigator” which shows Volvo’s
dealer standards. The company also holds the “VESC (Volvo Excellence Salespersons’
Contest)” for salespersons who have direct contact with customers, and a
worldwide after-sale service skills competition called “VISTA (Volvo International
Service Training Award)” for service staff throughout the world. In this
way, Volvo is endeavoring to enhance the skills of all its employees through these
contests competing in product knowledge and enhancing service quality.
Mr. Necip Soyak assumed the office of President of Volvo Cars Japan from August
1 this year. Volvo will make efforts to further enhance customer satisfaction
and reinforce its sales and service activities while remaining aware of market
competition under the new management in the imported car market in Japan where
competition is set to intensify further.
Entering the 21st century, Volvo’s belief in the infinite possibilities of
its brand, products and value and devotion to corporate efforts will build an
even brighter future together with its customers.
Source:
Volvo Media Relations
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