Over the decades, there has been a surge in the development of electric vehicles. Various scientists depict the essence of EVs towards achieving sustainable environmental goals. Although the industry has experienced gradual growth, the spread of COVID-19 has substantially impacted and altered the economic and political platform of the global automotive industry. Most studies illustrate challenges affecting Volvo after the pandemic. Before the pandemic, the automotive industry faced environmental issues and constant changes among its consumers. The pandemic accelerated the current economic and political issues resulting in unprecedented indecision within the automotive sector (Outlook, 2022). For instance, declining car sales, closure of other plants, inadequate supply of raw materials, the introduction of the nationalist industrial strategy and political uncertainty. However, numerous post-pandemic trends within the industry offer opportunities to Volvo. According to a survey conducted by Global EV Outlook, Volvo is highly ranked within Climate’s Council alongside Tesla. Moreover, the studies demonstrate that Volvo will majorly manufacture electric vehicles by 2030.
Decrease in Sales
The introduction of global preventive measures attempting to minimize the spread of the pandemic resulted in a 20.8% decrease in global EV sales. For instance, the introduction of strategies such as travel restrictions, lockdowns, and constraints of movements. Concurring to Volvo, it registered a 14.1% decrease of its 111.8 billion SEK (Volvo, 2021). In the first half of 2020, Volvo Cars’ global sales decreased by 20.8% to 269,962 vehicles due to travel prohibitions enforced by governments in several crucial regions, negatively impacting economic activity and showroom traffic.
Destruction of Supply Chains
Correspondingly, lockdown policies delayed the manufacture of Greely Volvo cars in China, causing problems with their worldwide supply chain, nearly cutting April sales in the largest auto market in half.
Subsequently, the pandemic caused issues within their supply chain, resulting in a semiconductor shortage. This is a significant economic challenge since Volvo greatly depends on semiconductors to regulate its operations, from brake platforms to technological procedures. According to the Swedish manufacturer, the issues in China stem from Covid-19 lockdowns in eastern China. The shortages of semiconductors led to a decrease in production. The Chinese Electric Vehicle Index review depicts an increase in supply issues, plummeting sales revenue in the US by 9.2%, Europe by 23.2%, and China by 47.8% in April (Index, 2022). Although the possibility of output and consumption gradually returning to their pre-pandemic levels with the lifting of lockdown restrictions, the delay in production capacity development may be irreversible and hence have a long-term impact on supply. Due to the limits, Volvo enforced temporary shutdowns at some manufacturing plants. The plant located in Daqing was closed due to Chengdu’s lockdown. According to Euro News, the closure of their plant resulted in a decrease in its trading shares which traded at 3.3%, which is a decrease at 1058 GMT, causing a decline in its Stockholm benchmark index by 1.7%.
Opportunities
Introduction of Online Concierge Programs
Studies denote that the pandemic magnified existing issues within the EV industry. Volvo and other organizations within the EV industry introduced measures and exploited opportunities to progress the company. Volvo took steps to advance its marketing strategies and insights into consumer feedback. Volvo also examined its current product lines to discover which, like the Volvo Concierge Program, performed better online than in-store. This online chat service offers Volvo clients and buyers white glove services that let them connect live with a call centre agent live, 24/7. Volvo, considered senior marketers alongside Tesla, introduced imperative strategies enabling and increasing their online presence to satisfy the constant change. The EV industry has seen rapid expansion in recent years, and by 2021, global retail e-commerce sales are expected to exceed $4.9 trillion (Alvstam, 2021). Watching how e-commerce has expanded so quickly in recent years is wonderful. Volvo jumped to capitalize on this development by building and enhancing its online presence. In 2021, there were 17.8% online sales, and the organization expects a 20.8% increase by 2023. Moreover, Volvo anticipates a gradual 5.2% increase in online sales in the coming years.
Social Media Campaigns
Similarly, Volvo has introduced and advanced its marketing strategies to attract new consumers. The plan provided innovation and positivity to their brand. For example, it used social media campaigns and wordplays to boost interactions. It consists of a selection of tools for construction that are high in effectiveness, output, and durability. The company has a devoted following on Twitter, Facebook, and Instagram. The company intended to encourage safety, optimism, and productivity even when everyone remains home after the COVID-19 incident and the nationwide lockdown. The goal was to recognize the importance of staying at home during the COVID-19 crisis and make the most of the available time for other beneficial tasks. The company sought to highlight the advantages and serve as a voice of encouragement despite the often-negative perception of working from home or the lockdown (Podesta, 2023).
References
Alexandre De Podesta, R. P. T. B., 2023. Industrial policy and the creation of EV Market in China: Demand structure, Sectroral complementaries and policy coordination. Cambridge Journal of Economics, 47(1), pp. 45-66.
Claes G Alvstam, T. F., 2021. Global Value Chain Strategies before and after the Pandemic crisis- The case of Volvo Cars. International Business Management, Volume 36, pp. 127-140.
Index, C. E. V., 2022. Volvo’s China Sales Slashed by Corono Virus Lockdowns. Asia Financial.
Outlook, G. V., 2022. Electric Vehicle Initiative. [Online]
Available at: https://iea.blob.core.windows.net/assets/e0d2081d-487d-4818-8c59-69b638969f9e/GlobalElectricVehicleOutlook2022.pdf
[Accessed 3rd March 2023].
Volvo, 2021. Media Volvo Cars. [Online]
Available at: https://www.media.volvocars.com/global/en-gb/media/pressreleases/270430/volvo-cars-sees-pandemic-impact-in-first-half-of-2020-expects-strong-recovery-in-second-half#:~:text=Volvo%20Cars’%20global%20sales%20during,economic%20activity%20and%20showroom%20tra
Xin Sun, G. L. H. H. Z. L. u. Z., 2022. Modelling potential impact of COVID-19 pandemic on global electric vehicle supply chain. Elsevier, 25(3).
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