“The most important thing is the customer.”
This is the statement from In-Man Sik (55), who has led Volvo’s sales and marketing as the one-clubman for the past 20 years.
On the 27th, when the autumn leaves were turning red, I had an hour-long conversation at the Volvo Korea headquarters in Gangnam, Seoul. He joined Volvo in 2003 as a service manager and is a veteran in the imported vehicle industry, having worked in service, sales, and marketing over the past 20 years.
With high interest rates, a downturn in the real estate market, and a domestic economy entering an unprecedented dark phase, imported vehicle sales have slightly declined by 1.2% to 197,742 units, compared to 200,210 units in the same period last year. Most imported car brands that have enjoyed a boom are experiencing a drop in sales. However, Volvo continues to show an upward trend, persevering through the economic downturn.
In-Man Sik stated, “During the three years of the COVID-19 pandemic, the imported car market was inflated due to the real estate and cryptocurrency frenzy. We closely observed the economic trends and predicted the bottom of the domestic imported car market affected by this frenzy. I believe the domestic economy will be worse next year.” He added, “It’s not something that can be prepared for alone during an economic downturn,” expressing gratitude towards the employees, noting that the pandemic allowed the Volvo team to come together and endure.
One of Volvo’s greatest strengths is its 5-year or 100,000 km free warranty. Customers incur no costs for replacement of consumables for five years, which is likely one of the biggest reasons for choosing to purchase a Volvo. In-Man Sik mentioned, “Most competing brands have extended warranties based on three years, requiring additional payment for some coverage, but with Volvo, customers won’t have to pay anything for consumables replacements during the five years. This is the greatest benefit to our customers.”
Many brands are shifting towards online sales. I was curious about Volvo’s plans in this regard.
“Cars are high-involvement products, and customers need to visit showrooms to examine the condition and evaluate the vehicle’s performance. While most automotive brands are moving towards online sales, online selling is something premium brands should avoid the most. Customer experience evaluations for online purchases are generally not favorable. Even if the demand for online sales grows, Volvo will focus more on building its network in the domestic market,” he emphasized. This year, Volvo will invest 111 billion KRW to expand its service network.
This is in contrast to other brands that are reducing investments due to the economic downturn. In response, In-Man Sik stressed, “This includes the expansion of the number of service centers, personnel, and work bays. If the number of service networks remains unchanged while sales surge, it inevitably impacts service quality. We always maintain the capacity of service centers in comparison to sales. To mitigate such side effects, we prioritize enhancing service quality capabilities and are progressing with a step-by-step sales strategy.”
Since 2012, Volvo has recorded double-digit growth rates annually, increasing its sales volume from 1,760 units to 14,431 units in 2022—more than an eightfold increase. Additionally, in the first half of 2023, Volvo ranked first in both the imported car service index (75.7 points) and Consumer Insight’s vehicle product satisfaction (868 points), while achieving second place in after-sales service satisfaction with a score of 856 points, just one point behind Lexus.
When we think of Volvo, we think of Tmap. In 2020, Volvo invested 30 billion KRW to jointly develop a Korean infotainment system with Tmap Mobility. Within just one year, Tmap infotainment was implemented in the XC60, marking the beginning of the Korean-style infotainment era. In-Man Sik elaborated on Volvo’s Tmap infotainment.
“Customer surveys indicate that the foremost reason for purchasing a Volvo is safety, with Tmap being the second most important factor. Currently, it has evolved to a second generation, featuring a personalized AI assistant, the latest Tmap, third-party maps, and an in-car payment system that integrates fuel and electric vehicle charging payments, along with OTT streaming services expected to be available by the end of the year.”
Volvo’s ‘step-by-step’ strategy reflects a commitment to gradually build its network in the domestic market, establishing the brand at the pinnacle of the automotive industry. This approach encapsulates a strong commitment that prioritizes customers above all else rather than merely focusing on high sales numbers.
As In-Man Sik stated, “Volvo invests one to two years ahead for the future,” the investment policy in the domestic network has shaped the current identity of Volvo.
Lee Sang-jin daedusj@autodiary.kr