Economy

The Hard Part About Selling Volvos In China

Bling and style are barriers that the Chinese-owned, Swedish-based company may not be able to overcome.

Volvo vehicle at an auto show in Shanghai
Volvo vehicle at an auto show in Shanghai
Wang Guoxin

BEIJING In mid-July, Volvo, the Chinese-owned, Swedish automobile brand, held a press conference to announce some good news: sales have risen nearly 30% for the first two quarters this year. If everything goes smoothly, the carmaker should achieve, for the first time since entering the Chinese market, total annual sales of 100,000 units.

Still, Volvo is not exactly celebrating. Among leading luxury auto brands, Volvo's sales in the Chinese market have fallen short of expectations. When, in 2010, Volvo was sold to Geely, a Chinese multinational automotive manufacturer, an ambitious plan was announced — the goal was to hit annual sales of 200,000 vehicles by 2015.

For the first half of this year, the top twelve premium car brands in China enjoyed 18% overall growth. Were it not for the fact that Audi has hit some public relations bumps that dragged down their sales figure, the average performance could have been even better. Meanwhile, Volvo sales, focused on the 90 Series range - XC90, V90 and S90, did not make a breakthrough in the world's largest market, even though China has become the leading market for the historic Scandinavian carmaker.

So, how do you communicate better with Chinese customers? How does one luxury brand differentiate itself from others in the same class? These are the hard questions for a player like Volvo. Apart from the three best-selling German brands — Mercedes, BMW and Audi — almost all other luxury brands, such as Jaguar or Cadillac, are all faced with the same challenge as Volvo. It's true that Cadillac has seen a 50% jump in sales in the first half of this year, but it was the result of a major price-cutting promotion and is unlikely to be sustainable.

Style comes first

What else can Volvo do to lure Chinese customers, apart from its famous reputation for building the "safest" cars? One possible option can be seen from what Porsche has done, by launching a relatively inexpensive SUV to accelerate its entrance into the consumer marketplace.

Another is to drastically improve services and bring customers a unique user experience. Lincoln has taken that approach and seen its sales double, especially compared to most other high-end car brands that have an abysmal image of their services in China, especially Mercedes.

Still, when taking two steps back to see what features have led to the most success on the Chinese luxury car market, it is almost style rather than by technical progress. Take Mercedes-Benz as example. Ever since the German carmaker adopted a new design language for its new generation S-series its sales have risen sharply for three consecutive years. Similarly, the particularly avant-garde frontal design of Lexus are immensely popular in China.

Characterized as "discrete," the typical Volvo car owner is not particularly interested in bling and swagger in general. But in our personalized consumer era, where young people count more and more on the Chinese market, there is no doubt that Volvo's Scandinavian clean and familiar approach faces serious questions. Its manufacturing and technological advantages should not be sacrificed, but if Volvo wants to explode on the market in China it must find a new way to shine.

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Geopolitics

How Thailand's Lèse-Majesté Law Is Used To Stifle All Protest

Once meant to protect the royal family, the century-old law has become a tool for the military-led government in Bangkok to stamp out all dissent. A new report outlines the abuses.

Pro-Democracy protest at The Criminal Court in Bangkok, Thailand

"We need to reform the institution of the monarchy in Thailand. It is the root of the problem." Those words, from Thai student activist Juthatip Sirikan, are a clear expression of the growing youth-led movement that is challenging the legitimacy of the government and demanding deep political changes in the Southeast Asian nation. Yet those very same words could also send Sirikan to jail.

Thailand's Criminal Code 'Lèse-Majesté' Article 112 imposes jail terms for defaming, insulting, or threatening the monarchy, with sentences of three to 15 years. This law has been present in Thai politics since 1908, though applied sparingly, only when direct verbal or written attacks against members of the royal family.


But after the May 2014 military coup d'état, Thailand experienced the first wave of lèse-majesté arrests, prosecutions, and detentions of at least 127 individuals arrested in a much wider interpretation of the law.

The recent report 'Second Wave: The Return of Lèse-Majesté in Thailand', documents how the Thai government has "used and abused Article 112 of the Criminal Code to target pro-democracy activists and protesters in relation to their online political expression and participation in peaceful pro-democracy demonstrations."

Criticism of any 'royal project'

The investigation shows 124 individuals, including at least eight minors, have been charged with lèse-majesté between November 2020 and August 2021. Nineteen of them served jail time. The new wave of charges is cited as a response to the rising pro-democracy protests across Thailand over the past year.

Juthatip Sirikan explains that the law is now being applied in such a broad way that people are not allowed to question government budgets and expenditure if they have any relationship with the royal family, which stifles criticism of the most basic government decision-making since there are an estimated 5,000 ongoing "royal" projects. "Article 112 of lèse-majesté could be the key (factor) in Thailand's political problems" the young activist argues.

In 2020 the Move Forward opposition party questioned royal spending paid by government departments, including nearly 3 billion baht (89,874,174 USD) from the Defense Ministry and Thai police for royal security, and 7 billion baht budgeted for royal development projects, as well as 38 planes and helicopters for the monarchy. Previously, on June 16, 2018, it was revealed that Thailand's Crown Property Bureau transferred its entire portfolio to the new King Maha Vajiralongkorn.

photo of graffiti of 112 crossed out on sidewalk

Protestors In Bangkok Call For Political Prisoner Release

Peerapon Boonyakiat/SOPA Images via ZUMA Wire

Freedom of speech at stake

"Article 112 shuts down all freedom of speech in this country", says Sirikan. "Even the political parties fear to touch the subject, so it blocks most things. This country cannot move anywhere if we still have this law."

The student activist herself was charged with lèse-majesté in September 2020, after simply citing a list of public documents that refer to royal family expenditure. Sirikan comes from a family that has faced the consequences of decades of political repression. Her grandfather, Tiang Sirikhan was a journalist and politician who openly protested against Thailand's involvement in World War II. He was accused of being a Communist and abducted in 1952. According to Sirikhan's family, he was killed by the state.

The new report was conducted by The International Federation for Human Rights (FIDH), Thai Lawyer for Human Rights (TLHR), and Internet Law Reform Dialogue (iLaw). It accuses Thai authorities of an increasingly broad interpretation of Article 112, to the point of "absurdity," including charges against people for criticizing the government's COVID-19 vaccine management, wearing crop tops, insulting the previous monarch, or quoting a United Nations statement about Article 112.

Activist in front of democracy monument in Thailand.

Shift to social media

While in the past the Article was only used against people who spoke about the royals, it's now being used as an alibi for more general political repression — which has also spurred more open campaigning to abolish it. Sirikan recounts recent cases of police charging people for spreading paint near the picture of the king during a protest, or even just for having a picture of the king as phone wallpaper.

The more than a century-old law is now largely playing out online, where much of today's protest takes place in Thailand. Sirikan says people are willing to go further on social media to expose information such as how the king intervenes in politics and the monarchy's accumulation of wealth, information the mainstream media rarely reports on them.

Not surprisingly, however, social media is heavily monitored and the military is involved in Intelligence operations and cyber attacks against human rights defenders and critics of any kind. In October 2020, Twitter took down 926 accounts, linked to the army and the government, which promoted themselves and attacked political opposition, and this June, Google removed two Maps with pictures, names, and addresses, of more than 400 people who were accused of insulting the Thai monarchy. "They are trying to control the internet as well," Sirikan says. "They are trying to censor every content that they find a threat".

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