Playing It Safe at Volvo

IRVINE, CA — It is Anne Belec's first month as president and CEO of Volvo Cars of North America LCC, and she is enjoying the give and take of a Volvo dealer conference she's hosting.

“It's a meeting with dealer representatives from all regions of the U.S. and Canada,” she says during a lunch-break interview before the afternoon session at company headquarters here. “It's fun.”

The Retailer Creative Forum's agenda items are serious enough, though.

“We're discussing strategies, positioning and what we want to focus on from a communications standpoint,” says Belec. “We review past ad campaigns and talk about new ones, so we can integrate our marketing with the dealers'. It's important to have one voice in what we are communicating.”

She calls the day-long meeting highly participatory. “Dealers are not shy about telling you what they think.”

Belec met many Volvo retailers during dealership visits between the time she joined Volvo North America in January as CEO-in-waiting and when she officially took over upon predecessor Victor Doolan's retirement in April.

“I spent three months traveling around, talking to retailers and getting their feedback,” she says.

Among things they told her is that Volvo's lineup is complicated, with too many combinations and stand-alone options.

“They said it was hard for people on the showroom floor to explain the large number of offerings to customers,” says Belec. “So we're looking at simplifying that by, say, packaging options that have high take rates rather than offering them individually.”

She says she is on the same page with dealers who told her it is vital that the Swedish luxury brand stay true to its core values that start with vehicle safety but also include human caring and environmental concern.

“Volvo dealers are passionate about safety,” she says. “It's what makes them stand out in the marketplace.”

An ambitious dealership initiative in the works is a plan to enhance the Volvo customer experience and relate that to the brand's attributes.

Belec explains: “We're looking at the entire customer satisfaction program and how we can take that critical extra step.

“We first articulate that Volvo is a caring company. Then the question is: ‘How do you translate that at the retail environment?’ It will take time to develop and roll it out, but it's a unique area of differentiation.”

Volvo North America and its 350 dealers are coming off a strong 2004 with U.S. sales of 139,066 units, a 3.3% increase compared with 2003. It was the only Ford Motor Co.-owned brand to post a sales gain, except for Mazda Motor Corp., which saw a modest 1.9% volume increase.

“Our dealers are pretty happy right now,” says Belec. “They are always looking for new product, though. I tell them we can't have a new-vehicle launch every year.”

None are planned this year. The new S40 sedan and V50 sport wagon debuted in 2004. So did an XC90 cross/utility vehicle with an optional V-8 engine, Volvo's first V-8 venture. It won't be the last. The next-generation S80, due out in early 2007, likewise will offer a V-8 option.

The bigger engine is attracting a different type of buyer from typical safety-conscious Volvo owners.

“Like any brand, it's important to bring in new and young customers,” says Belec, whose company's “Volvo for life” slogan embodies a double- meaning pitch of long-term customer loyalty and vehicle safety.

Volvo hopes to appeal to the young set with the planned late-2006 introduction of the C30, an entry-level compact that will be the smallest car in a lineup that now numbers nine vehicles.

“It will be a much smaller package but absolutely true to Volvo's safety standards,” says Belec. “Safety doesn't have to be separate from being attractive and fun to drive.”

Volvo's buyer base remains skewed towards women. Nothing wrong with that, says Volvo North America's new CEO, because “women buy 50% of the vehicles and influence 85% of overall purchases.”

Belec is a Ford lifer, having spent her entire career at Ford or one of its holdings.

Born in northwestern Quebec, Canada, to a biochemist father and an English professor mother, Belec attended the University of Ottawa, graduating in 1983 with a business and marketing degree.

She landed a job with Ford Motor Co. of Canada Ltd., stayed there for eight years and then joined the U.S. parent company, holding a variety of executive positions in Ford brand management, marketing, sales and service. She was vice president of sales operations for Volvo Car in Sweden before her new posting.

Volvo is a perfect fit for her because its core values “reflect my personality,” Belec says. “It was an easy transition.”

Gov. Schwarzenegger's 2 Questions By Steve Finlay

PALM SPRINGS, CA — In 1989, a stalker, infatuated with actress Rebecca Schaeffer of the TV show “My Sister Sam,” paid a couple of dollars to get her home address from the mailing list of the California Department of Motor Vehicles.

He then went to her residence and killed her.

In the aftermath of the murder, the state stopped making DMV mailing lists available to the public, including auto dealers that often used the department's address database to mail sales and service fliers to motorists.

That slammed database door might open again, if only a crack.

While neither dealers nor anyone else would have direct access to actual names and addresses, a proposed change would allow dealers' marketing material to be enclosed with license renewal letters that the department routinely sends to owners of the state's 29.3 million registered vehicles.

California DMV Director Joan M. Borucki tells the state New Motor Vehicle Board's fourth annual industry roundtable here that she is not opposed to that proposal.

She says 10 other states allow such advertising insertions for a fee, and she advocates “unabashedly lifting good ideas.”

Moreover, when discussing such matters with Gov. Arnold Schwarzenegger, she says: “The first question out of his mouth is, ‘What are other states doing?’ The second question is, ‘Why aren't we doing it?’”

Insert-ad rights could go to the highest bidder, says Peter Welch, president of the California Motor Car Dealers Assn.

Dealer David Wilson, chairman of the motor vehicle board, says the DMV database is a “gold mine” for marketing. He predicts the state could completely eliminate its mailing costs by allowing dealers to include ad material with license notification letters.

A Toyota dealer, Wilson says he wrote a letter to the DMV proposing that he be allowed to pay for including a dealership sales-pitch letter with DMV license renewal notifications sent specifically to owners of 4- to 6-year-old Toyota owners in zip codes in and around his Orange County dealerships.

Wilson says: “You know the notification letter is going to be opened because it's from a state agency. You know the mailing list is 100% accurate. And you can target whomever you want to with a message like, ‘Hey, why spend $300 to renew your license when you can buy a new Toyota?’”

The result of his dispatching that letter of proposal?

“I never heard back from them,” says Wilson. “Yet, we have a budget crisis in this state.”

If California eventually allows such marketing through the DMV, Wilson says, “There would be a bidding war. I want to do it. But there are other Toyota dealers in Orange County.”

An opponent to the idea is Alan Skobin, vice president of Galpin Automotive Group in North Hills, CA.

“Many would perceive it as unfair for one dealer to have such access to another dealer's customers,” says Skobin.

Then there's the question of non-automotive firms potentially including letters pitching their products and services. In which case, DMV mailings could become thick packages.