Volvo's long-time commitment to making safer cars was once rather exceptional in an auto market that often considered safety an afterthought. But now, it seems prophetic.
As competitors catch up to the Swedish safety innovator, Volvo is now repositioning itself as a luxury brand for the electric-vehicle age.
related investing news
It is a daring move for a relatively small brand, which warned investors in late 2019 of shrinking profit margins due to slowing global car demand and a global trade war.
But it is a good fit for Volvo, which is owned by the Chinese automaker Geely. China is one of Volvo's most important markets and a key market for electric vehicles. The Chinese government sees electrification as a way to reduce the country's severe pollution problem and to help Chinese automakers gain a technological edge in the global automotive market.
"So entering the luxury market, especially as a European brand, but not a German, is definitely tricky because you're up against competitors who've been doing it for decades that are extremely well known," said Jessica Caldwell, executive director of industry analysis at Edmunds. "Audi, Mercedes, BMW, all have deep pockets, all have big marketing spends, are have really big advertising budgets."