A Dealer’s Take on Why Subaru Ate Volvo’s Lunch

[tjts1]

We’ve kicked around as to why Volvo lost their market to Subaru and have come up with a few thoughts. The traditional Volvo buyer was a value buyer and the brand characteristics played to that. When Volvo, in a search for greater profits, positioned themselves as a cheaper alternative to MB/BMW, they de-emphasized value and played up luxury. Safety, became available through out the industry. They raised the prices.

Lastly, Volvo was slow to recognize the appeal of AWD and when they did they responded with a too finicky system. One of the first questions Volvo owners ask when considering an Outback is, “if I need to replace one tire, do I have to replace them all?” And “if I don’t, is my warranty voided?”

http://www.automobilesdeluxe.tv/a-car-d ... vos-lunch/

I certainly agree with the first paragraph and although I personally never felt the need for AWD, the problems with volvo's system are well known. By the time the second generation XC70 hit the market, Volvo's AWD reputation was already ruined and the shift up market had begun. What do you think?

[jblackburn]

Coming from cars like the 240 to the new FWD models, I think Volvo certainly made a big change. In a way, they changed everything.

I would never have paid $38,500 for my S70 back in 1998. It's nice, but it's not THAT nice. My parents had a top-of-the-line big Ford Expedition for less than the S70 cost - new - in 1998. Upgraded V8, leather seats, sunroof, and could haul 9 passengers. Even the S60s/V70's. I never thought they are as nice as a BMW or Mercedes and I can't understand why they demand the premium they do new.

I have always thought Volvos are more on par with say, a Saab or Buick - perhaps the Audi A4/A6, than something like a BMW/Mercedes 3/5 series or C/E-class. Even the S60R was never a real competitor to an M3 or AMG. S80's are nice, but they're still no S-class or 7 series.

Subaru, like Toyota but with much fewer models, has recognized their niche, and stuck to thinking of their buyers before buying a car. Subaru owners want a rugged car that can take a beating, doesn't require a lot of maintenance, and can be loaded up at a moment's notice with lots of people or stuff to go anywhere. That's what they know, and that's what they advertise in their commercials. As a result, for the past 10 years or so, Subarus have been unrefined, loud, slow, and clunky cars that get terrible gas mileage, but are downright reliable and can haul or DO just about anything. Same formula that Jeep relied on for many, many years with the old Cherokee and Volvo relied on with the old RWD cars. Many buyers bought a used one after a few years and expected them to be the same as older models, and they never met up to expectations a few years down the road.

Then you've got the common problems among all the models that bring down their reputations. 5-speed and T6 transmissions, throttle body issues, problematic AWD systems...the old models never had this, and I think many buyers that owned a Volvo before and went through this with one of the newer models said (like I did!), "never again".

As the times have changed, so have people's expectations of what they want in a car. In the 90's, gas was cheap and people liked to go on family trips and do things. Hence the flood into the market of minivans and HUGE sport-ulility vehicles. Now, one of the main priorities for people is gas mileage. Enter the flood of crossover vehicles and good small cars into the market. Almost every automaker right now has come up with a high-quality small or midsize car that gets very good gas mileage in a market that was long dominated by Japanese cars. And in shopping for cars recently myself, the domestic competetion - that has been crap since the 80's - is actually very far ahead of the Asian models on the market at this time. Honda/Acura have fallen very far behind the rest of the market IMO. Toyota's Corolla was never a good car, but it's very far behind the rest of the small-car market at the moment. Volvo doesn't have anything that gets over 30 mpg in the US market right now - even the new BMW 3-series that has always come with a 6-cylinder motor, has given that up for a 4-cylinder turbo that gets 35 mpg highway.

It's like evolution in a sense, and those automakers that can't keep up get left behind.

[matthew1]

When safety became merely a commodity via technology improvements and market demands, Volvo lost its niche.

Safety became apples-to-apples in other words. Volvos became just another higher-maintenance European choice. Subaru thus had a level playing field where they could exploit the Japanese reliability advantage, real or perceived.

[tomatoes4all]

Funny enough, many moons ago we called Subarus "the japanese Volvo". As a family with 2 cars, a Volvo 960 and a Subaru Forester most of these arguments ring true. When it comes to car ownership many people forget to count the cost of depreciation. Any european car here in Australia depreciates hugely; we're talking 25% annually in the first few years. So a $40k Volkswagen Golf has a trade-in value of $22k after 2 years. That is a whopping $750 depreciation per month!! Volvos are just as bad; we owned a V70T5 for several years, bought it used for 22K as a 6 year old. Original price was $80k. The PO depreciated $700 plus every month for 6 years!! They also cost a monstrous amount of money to maintain, let alone repair. That's one of the reasons I own a RWD Volvo now, relatively easy to fix, build like a tank, safe and best of all: NO depreciation! Our previous T5 was not reliable (never buy a un-loved and badly maintained used Volvo), cost a fortune to repair and was worth the price of a set of new tires on its 12th birthday. But it was safe... That was the main reason we bought it in the first place, we later realised we suffered from New Parent Syndrome. Our MY2010 Subaru Forester is safe (5 star rating, full-length curtain airbags, full time AWD), is cheap to maintain even at the dealership, is comfortable and, best of all, depreciates about 5% annually. When my 960 goes to the great caryard in the sky, hopefully many years from now, I'll probably replace it with a Subaru. With a bit of luck Subarus will look better then compared to how they look currently....
Cheers, Erik.

[matthew1]

With a bit of luck Subarus will look better then compared to how they look currently....
Cheers, Erik.

Yea that Subaru SUV "B9 Tribeca" got hit with the ugly stick, 2x4 and tree.

[rmmagow]

I've got and drive both, a 98 V70 AWD with 168000, and a 2001 Forester bought new and now with almost 170000. The suby had head gasket issues and continuous wheel bearing issues, idles poorly and stalls a lot. But it put up with my wife and son both learning how to drive using that car and now is putting up with my kid flogging it. It cost about 25K (US) when I bought it and is worth maybe 3500 or so now. Maintenance hasn't been terrible but the car rust underneath is hell on nuts and bolts although no rot at all. It has been a good car.
The Volvo was a well cared for car and well prepped by the person I bought it from. I did need to replace the strut mounts, a timing belt/WP and yank out the propshaft. It runs good but is temper mental a bit at times with MAF and boost issues. I paid about 3K for it and don't feel ripped off.
Truth is, as I am looking for another car for my wife I am leaning to the Volvo since it rides better but I don't know if I'd turn away from a decent Suby.
They can keep the new Volvo's, all this "upmarket" crap is annoying to me. Saab went upmarket didn't they

[fazool]

When safety became merely a commodity via technology improvements and market demands, Volvo lost its niche.

That's what I was planning to write as I read this thread. Volvo had a few niche characteristics - things that everyone said "equated" to a Volvo:

1) safety - when everyone thinks Volvo they think safe car. For a while there, they were viewed as the safest cars in the world. It didn't matter what the Volvo looked like or had for features - it was safe!

2) longevity - the whole Volvo high mileage club badges, the legends of million mile cars, etc. what the Volvo looked like or had for features - it would go forever!

3) quirky styling - "boxy but good" .

These things basically created an aura of a car company more interested in safety and reliability and drivers who weren't slave to the whims of yearly styling and fashion changes.

The 850 introduced a whole new attitude. Styling and features started becoming more important. As Matthew said, safety became "commonplace". Cars were being sold with 100K warranties so the longevity wasn't convincing anymore.

I love my Volvos. I will stick with them until Greely starts manufacturing in China (at which time I will forever disavow being a Volvo-phile). I love my Volvo's, but they certainly have changed. The <2010 P2 models are my favorite styling, but I think if they would have taken the 850/S70 cars and really engineering more safety features and more longevity (in lieu of modern styling or modern options and feature) they would still have those three niches.

We *HAD* cars that were : the most reliable, the most safe, throwback styling, limited features, inexpensive

now We have cars that are : basically reliable, very safe, modern styling, feature packed, expensive


My opinion on a scale of 1-10 relative to other cars:

Relative to the other cars, they gave up a little safety, a little more reliability, a lot of affordability and gained luxury and style.

A bad trade IMO

[matthew1]

I've begun formulating a Volvo opinion lately. They're durable but not (relative to Asian cars) reliable, everything else being equal -- maintenance being at the top of the list.

[MoVolvos]

I've begun formulating a Volvo opinion lately. They're durable but not (relative to Asian cars) reliable, everything else being equal -- maintenance being at the top of the list.

Owned 87 Integra and 95 E420. Kind of marriage between the two. Volvo drives better than both even though all 3 had new suspension. Integra Monore, E420 Bilsteins, S70 Gabriels. The Volvo is surefooted and a tank like the Benz and yet tossible like the Integra. The Volvo has by far been the easiest to work on, WELL perhaps because of the Forum but has definitely required the most repairs and consumables .

Blessings,
BKM
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[jblackburn]

There is that caveat - Japanese cars are freaking impossible to work on. I had to put a new coil pack into my girlfriend's V6 Camry and it requires a lot of cursing at and bending at odd angles to even reach. But it does have a very powerful, silky smooth engine. I had an old Honda Accord and there was no room under the hood to reach ANYTHING. For example, the fuel tank had to be dropped to change the pump; the axle removed to access the alternator. Like the Volvo, though, the motor still ran like it was new at 200,000 miles.

The Volvo is pretty straightforward to work on most things - or at least it was thought out in terms of things that need to be replaced. But it's still nowhere near as easy as the Saab 900 or BMW 2002 I grew up learning to work on.