Thursday, December 5, 2013

Chinese and their Wolwo cars

What happens when a long established Swedish car manufacturer is brought under the control of its new Chinese owners? The result - a clash of the titans.

Since the Chinese takeover in 2010, an unnerving debate has rocked the top echelons of the Volvo Car Corporation. The two titans, China’s billionaire owner Li Shufu and the established board of Volvo headed by the CEO Hakan Samuelsson, clashed over the positioning of the company. Should Volvo maintain its “safe, solid and understated in a Swedish way” or expand into a “wannabe luxury brand” pandering to a Chinese taste for excess and bling?

This is the classic cultural clash playing before our very eyes in the commercial world.

Li Shufu believes Volvo could double its global sales by just selling into China’s new rich. China’s new ‘bling-driven’ sector wants to tout their newly acquired social status by driving large premium high powered cars. Manufacturers from Germany have been their natural choice - Audi, Mercedes and BMW tops the list. Volvo’s niche, cultivated over decades focuses on safety and understatement, sits uncomfortably amidst this “bling-driven" segment.

This polarity between Volvo's European approach to management and its new owner may have broader implications on the way we universally define ‘development’. If Li Shufu prevails in his approach and drags Volvo out of its comfort zone into China’s premium, ‘bling-driven’ market, it would join the ranks of many brands moving away from their traditional positioning. KFC in Indonesia has added packets of rice to their menu complementing their spicy chicken, Macdonalds’ “Fortune Burger” for Chinese New Year, VW’s localised Santana cars and Starbucks ‘green tea cino” are examples of the emerging sino-nised brands.

Could this be the harbinger of the sinonisation of the west?

Would western women start to go under the knife to make their faces more eastern? Would the Queen start to have soyabean milk with her tea? Would the first lady from the USA dress in the traditional cheong-sam on official engagements? And would it be considered polite to drink from a soup bowl instead of using the badly designed soup spoon during Thanksgiving dinner?

Somehow I don’t think so, at least not in my generation or even the next. But I do believe that in the next 100 years, the current western-biased definition of what is considered developed will have a sino slant.

The industrial revolution started in UK in mid-18th century was the biggest cultural export ever created by Europe. The resulting westernisation has pervaded every fibre of the world. It has influenced the way we live, work, play, think and what we consider as beautiful. In the next century there will be a reversal – Sinonisation of the west and the concept of what is considered “developed” will shift to an Asian-biased perspective. The Australian government has recognised this and in 2013 published the country’s new direction entitled “The Asian Century”. Australia has publicly announced their intention to be part of the new world – the Asian led century.

Soon our grandchildren may even find Yangzhou Fried Rice on the menu of Macdonalds in New York city replacing the BigMac, or Long-Jing teacino at one of the cafes in Venice replacing the Cappuccino and the street kids in Boston running around saying "Ni Hao" instead of "yoo!".

In the meantime we can continue to exist in the knowledge that when we drive a Volvo we feel safely conservative until Volvo’s Chinese plant in Chengdu, starts to produce a stretched and more luxurious “Bling version” of the smaller S80 sedan.

They might even badge the S80 as the S80W..... "W" for Wolwo.

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