(Bloomberg) -- Picture a Volvo.
You’re imagining a boxy, full-size station wagon, right? Well, that classic shape has long been gone, but it’s about to make a modern comeback.
Back in the 1980s and '90s, Volvo was America’s top-selling European import brand—and the first to surpass the milestone 100,000 annual sales figure. At a time when domestic manufacturers were beginning to abandon the traditional wagon market, wagons routinely made up one-third of Volvo’s sales, more so in such top markets as the Northeast or the coastal West.
“It has been the biggest part of our business” said Ray Ciccolo, who has run Boston Volvo, one of the nation’s largest Volvo AB dealerships, since the early '60. “Over the years, we have at times struggled selling the sedan because the wagon was so popular. It’s a very practical vehicle.”
Yet, as Volvo began to get trounced in American sales in the late 20th century by more upscale and sporty imports such as BMW AG and by more refined ones like Toyota Motor Corp.'s Lexus, the brand decided it needed to ditch this utilitarian heritage in favor of a move up-market. This meant adding more sensuous curves and luxury features to its vehicles, as well as expanding into the burgeoning Crossover/SUV market. The company even, for a brief period of time, entirely ceased to sell wagons in the U.S. in the late aughts.
“I think it was about 2006 or ‘07 when Volvo actually withdrew from the wagon market. When I read that, my head almost exploded,” said Bob Austin, who managed communications for Volvo from 1978 until 2001. “How can you do this? It is part of your heritage, it is part of your value system. If there wasn’t a Volvo wagon, somebody should have invented one, because it belongs here.”
The Box Is Back?
This summer, Volvo will release an all-new, handsome, full-size V90 wagon and an all-wheel-drive V90 Cross Country. They will join its mid-size V60 and V60 Cross Country in an expanded wagon lineup, even though those earlier models made up only 7.5% percent of the brand’s sales in 2016. The Cross Country will be available on dealer lots, but the V90 will be attained only through special online order. Volvo recommends flying to Sweden to take delivery—enjoy the free trip, with a friend, on Volvo—or they’ll gladly just ship it to your local dealer.
Why does Volvo continue to feed wagons to its customers, when the vehicles accounted for only 1 percent of all its American auto sales in 2015? First, wagon buyers tend to be the most affluent of any category; luxury brands, especially such striving luxury brands as Volvo, covet the opportunity to be loved by upscale consumers, which helps reinforce an insider message of discerning taste. Call it Stealth Wealth. Daimler AG's Mercedes-Benz, the only other current exporter of large wagons to the U.S., confirms that the average household income for its E-Class Estate is the highest of any vehicle category it sells, though, as with Volvo, it’s nowhere near Mercedes's most expensive vehicle. “They’re bought by people that can afford a lot more,” Ciccolo said of Volvo wagons. “But they’re not ostentatious.”
Second, Volvo wagon owners are among the brand’s most dedicated customers—advocates and ambassadors of key importance in luring consumers from competitive brands. “There are Volvo customers generally, and then the wagon customer is a unique subset of that,” said 26 -ear-old Thomas McIntyre-Schultz, who works in Volvo’s social media team and is the owner of a 2004 Volvo V70R wagon. “They tend to be our most passionate enthusiasts.”
Loyal Volvo Owners
This is certainly the case for 61-year-old Massachusetts banker Dick Anderson, who has serially owned 15 Volvo wagons over the past 25 years. “I’m interested in cars. I know what the competition offers. But at this point I wouldn’t even consider buying anything else,” Anderson said. “I am a loyalist.”
What is it that Volvo wagons offer this category of upscale consumer? “I think it is the versatility, the driveability, and there is some eco-friendliness to it,” Anderson said, explaining that the wagon’s environmental impact is far less than that of a big SUV. More important is the message the vehicle sends—or the one it doesn’t send—to peers and neighbors. “I think it says you’re a thinking person. You think about safety. You think about value for your dollar, and you’re willing to spend for quality,” Anderson said. But the wagon isn't flashy: “It’s quiet and substantial. It’s kind of like, I’m a player, but I don’t need to show off. I’m a thinking person, but I don’t need to prove it.”
If you’re still unpersuaded of the validity of staid wagon design, simply look at Subaru Corp., which has parlayed its automotive brand's ever-unchanged Outback into a position as the ninth-bestselling automaker in the U.S., moving nearly as many vehicles as Volkswagen Group and BMW do, combined. As that brand continues its expansion, it is also moving upmarket, with more luxury features, higher-quality materials, and even semi-autonomous driver-assistance technology. (Watch your back, Volvo.)
Station Wagons Will Rise
This niche, yet profitable, market has induced other manufacturers to jump into (or back into) the category here in America. Audi AG has just introduced its new A4 Allroad. Jaguar Land Rover Automotive plc's Jaguar brand just confirmed that its XF Sportbrake Estate will reach the States this year. Porsche AG’s Panamera Sport Turismo wagon should arrive around the same time, along with GM's Buick Regal TourX, a rebadged version of a wagon sold in Europe by former General Motors Co. subsidiary Opel, now owned by Groupe PSA.
The vintage wagon market appears to be heating up as well. Over the past five years, wagon registrations with classic car insurance leader Hagerty have shot up 1,400 percent, nearly doubling in the past year alone. Vehicles from Chevrolet and Ford Motor Co. lead the pack, but Volvo's are just behind them, and the classic 240 wagon of the 1970s to the '90s—of which over a million were made—are the brand’s top contender. They’re part of a renaissance in collecting, as they tend to be owned by people aged 30 to 50, the next key generation of classic car collectors. Expect the 240s' value to go up soon.
“All Volvo station wagons have a cool quirkiness to them, and the Volvo 240 wagons—and later series—were such a big part of a lot of Generation X and millennial childhoods that they should stay relevant in the future,” said McKeel Hagerty, chief executive officer of the namesake insurance company. “Their longevity and high build numbers will hold values back, but don't misinterpret that as a lack of interest.” In other words, because the Volvos were so durable and so many were made, they won’t enjoy the market scarcity of fancier (and/or less hardy) classic cars, but that doesn’t indicate a lack of passion among owners and potential owners, or a lack of potential upside for particularly well-preserved examples.
Many classic Volvo fanatics think the brand has turned too smooth in recent years, creating a wagon line that looks like any other. They also quibble with pricing, and they're not shy about expressing concern, via social media, that the brand has gone too upscale with its latest entry: The V90 Cross Country is a $55,000 wagon that can practically drive itself.
“We have plenty of people who are upset about basically everything we make,” McIntyre-Shultz said. But as a classic wagon fan, he takes another approach. “The V90 is obviously different than other Volvo wagons from the past, but it definitely doesn’t disrupt that heritage,” he said. “It’s just another component you’re adding to that personality. Personally, I love the luxury features. To have a practical wagon that also gives me ventilated seats and a panoramic moon roof and 360 camera, that sounds awesome to me.”
To contact the author of this story: Brett Berk in New York at BRETTBERK@MAC.COM.
To contact the editor responsible for this story: Chris Rovzar at firstname.lastname@example.org.
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