Volvo boss
Hakan Samuelsson awarded top honour at 2020 Autocar Awards
By any
measure, what he’s achieved in eight year as Volvo’s boss is remarkable. Here’s
how he did it
7 July 2020
If it’s an
exaggeration to say Håkan Samuelsson has worked miracles at Volvo since becoming chief executive eight
years ago, the overstatement can only be slight.
In that
time, Volvo has doubled its annual car output to 700,000 units, raised its
brand image to par with Audi-BMW-Mercedes, restored its previously weakened grip on the
US market by opening a factory there, made big inroads in China and expects its
car range to comprise 50% pure-electric models by 2025. Small wonder Autocar’s
judging panel chose Samuelsson to win this year’s Issigonis Trophy, our premier
award.
Given
Volvo’s sheer pace of change, Samuelsson’s craggy-voiced, deliberate way of
speaking takes you by surprise at first. But soon you learn that the voice
suits the management style: this is not a man who bounces about spouting
targets and KPIs. He actively dislikes those – so how has he delivered the success?
“There are
three factors,” he says. “First, we’re selling our best Volvos ever. Our
quality and technology are good, but now we have great design. Ten years ago, I
think we can agree Volvo styling was not at its best. Second, we’ve regained US
momentum. Five years ago, people speculated that we’d leave America altogether.
Dealers asked how we expected to do well in their country if we didn’t invest
there. That was an eye-opener for me. Third is the advantage of being owned by
Geely, which gives
us premium access to China. Add those up and you see our progress.”
Did
Samuelsson expect such growth – six record years to 2019 and expansion of
around 10% a year? “If you want to be a great company, the last thing you say
is that you want to be great in 10 years’ time. It doesn’t create energy or
motivation. It’s what you do today that counts,” he says. “We concentrated on doing
what was needed and were confident of a good result.”
Progress
meant finding a new way of facing up the Germans. “We decided long ago that we
had to be premium. But we did too much benchmarking and copying. My first
question was: what about safety? That’s a traditional Volvo value. People told
me everyone had it these days. But the Germans are successful because they have
known attributes: technology for Audi, driving dynamics for BMW, premium
quality and prestige for Mercedes. We needed something different.”
Samuelsson decided
Volvo had to be “human centric”, with safety and sustainability at its core.
“If you looked at society, you could see the wind blowing in that direction,”
he says. “We began to major on it. Safety of families became important and a
part of that was being bold enough to introduce a speed limit. [All Volvos are
now governed to 112mph.] And sustainability matched that. For many people, guarding the planet
is a part of guarding their families.”
Virus
effects notwithstanding, Samuelsson is confident of maintaining Volvo’s
progress: “If sustainability continues to be important, we ought to be able to
keep growing more or less as we have. At 10% a year, we’ll be much bigger in
five years. But there’s more to this than just saying we’ll do a million cars
in two or three years: we must do what is right.” Part of Volvo’s recipe is to
accelerate electrification to cover a slow adoption of battery EVs so that, by
2025, 50% of Volvos will be PHEVs and the rest pure EVs. Surely such an
increase will be bad for profits, I suggest, given that no one seems able to
make them pay at present.
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Samuelsson
bats this away. “The cost of today’s EV won’t be the same tomorrow,” he insists.
“Batteries will fall in price and the price of conventional cars will go up. As
ever, profitability is geared to how attractive your products are and there’s
no doubt our electric cars will be really attractive. They’ll have the
sustainability thing we’ve talked about, and then there’s the driving
experience. It’s very difficult to find any drawbacks with that.
“Of course,
we still need to improve EV range. You should be able to drive eight hours,
then stop to recharge your car as you recharge your body. But EV ranges will
improve rapidly. In five years, experts say range will double, and it will
happen. Many more brains are concentrating on battery chemistry than ever
before.”
Samuelsson
admits to seeing plug-in hybridisation as “a sort of bridging technology”,
especially useful where electric car infrastructure proceeds slowly. But as
Volvo bolts towards its 50/50 EV/PHEV target around 2025, he believes the most
serious danger lies in not transforming the company fast enough. “We need to go
quickly,” he says, “and we need to bring our customers with us. The cars can be
even more Volvo than they are now.”
Samuelsson
agrees that in the changing world, the old-style infrastructure with which all
car companies are saddled is a tremendous problem, although he insists an even
bigger problem would be trying to create products that tried to preserve old
technology: “Thirty or 40 years ago, there were shipyards where we develop cars
today. It’s good for Gothenburg and for Sweden that the shipyards are not there
any more. The people working there found new opportunities. In cases like this,
I don’t believe we should protect old jobs. It’s better to help people develop
new skills.”
Finding a
future for Volvo’s engine plant is a prime example, Samuelsson believes. “We could
keep our plant as it is but keep slimming it down as demand declines,” he says,
“but that would not be very fulfilling for our people and we would lose our top
talent. Maybe it’s better to form a new combined engine operation with Geely,
building really fantastic hybrid engines for the whole group. If you’re early
enough into a change like that, it’s possible your operation becomes
interesting to other manufacturers. Let’s see…”
We turn to
car sharing, and I expect Samuelsson to talk in generalities like all the
others, especially with Covid-19 introducing such uncertainties. But as I’m
learning from other topics, he has a clear view of this, too. “It’s shaky at
present,” he admits, “a bit like electric cars 20 years ago. That was a great
idea no one had mastered. But to me, you have to go back to the purpose of car
sharing: if people in big cities want personal mobility without the hassle of
owning a car and a garage, we should certainly offer it.” Volvo already has an
experimental project in Stockholm called M.
“Plans so
far have concentrated too much on short distances,” he explains. “We should
stay out of Uber territory and go into conventional usage: a car for a day or a
week. And make the system station based. If you allow people to drop the car
anywhere, they’ll do just that. Collection costs will be huge. Any solution
must both be profitable and provide customer value, not just geared to pumping
cars out of a factory. We’re working on all this right now – a product and a
procedure – and although we’re not quite sure we have a plan that’s absolutely
clear and profitable, I’m optimistic.”
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We conclude
with a cheerful discussion about Samuelsson’s way of doing his job. He’s not a
workaholic, he says (“to work well, you have to be smart”), and he tries to
maintain a self-critical distance from the job (“this business is not
perfect”). He particularly admires people who deliver big change in business –
such as the creator of the Ikea furniture empire, who launched an entirely new
idea unaided and from scratch. Now 68, Samuelsson extended his contract a few
years ago – to 2020 – but shows no sign of leaving. In any case, he now has a
new task: at the request of group chairman Li Shufu, he is starting to promote
a merger that will turn Geely’s disparate corporate empire into a more cohesive
automotive group.
“This makes
it rather difficult to walk away,” he says with a grin. “Besides, I’m very
lucky to have this job, the most exciting I’ve ever had. It’s a nice company
with many good people, and as long as I feel like this – and they can stand me
– I’ll stay a bit longer.”
What's
in his garage? (once it's rebuilt)
The Volvo
boss describes himself as a keen car person, although he’s far too committed to
electrification to fit the ‘petrolhead’ description.
“I wouldn’t
describe myself as a car fanatic,” Håkan Samuelsson says. “But I’ve always been
very interested in cars from the engineering point of view [he has a master’s
degree in mechanical engineering] and I’ve always been fascinated to see how
things develop.
“I own two really nice cars and I’m currently
having a new garage built to accommodate them better. One is a Volvo P1800, the
most stylish Volvo ever built. We’ll use that for summer trips and fun. The
other is a new Polestar
1, a car I’m very
proud of.”
Samuelsson
notes that the P1800 was the car used in the 1960s British TV detective series
The Saint by its hero, Simon Templar. Of the Polestar 1, Samuelsson says: “I’m
sure that if Simon Templar was still around, he’d be keen to have one.”
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