Fleet News

VW in challenge to Swedish car makers

May 2000: As in most car-producing countries, domestic manufacturers dominate the Swedish company car market.

Volvo is the biggest supplier with more than one third of the Swedish fleet market, while one in every 10 company cars is a Saab. This is the reason why the Swedish car fleet consists of bigger and more expensive cars than in most other European countries.

In Sweden, a Volvo is not a luxury car, but for a long time it has set the standards for the cars that companies offer their employees. You see a lot of sales representatives driving a Volvo V70 or Saab 9-5 - often the station wagon. That is why it can be very hard for fleet managers to convince their drivers to drive a Ford, Toyota or Opel, just because their (foreign-owned) company has signed a world-wide policy that does not include Volvo or Saab.

Another consequence of our big domestic cars is that the Swedish company car system is not very hierarchical. The size of the engine, the number of valves, and the trim level - none of these are really important when comparing company cars. Instead, often companies limit choice by the price of a car and its make.

Almost no Swedish-owned company prevents their drivers from choosing a Volvo, except for businesses belonging to the Wallenberg group, in which Saab was a part until recently sold to General Motors.

Traditionally, companies' shortlists included Volvo, often Saab, and one or two from Ford, Volkswagen and a Japanese make. In recent years Saab has had difficulties defending its runner-up position from Volkswagen, problems that Ford and Toyota have also been facing.

This is because of a rising interest in diesel-powered company cars since the tax system was changed in 1997. Right now, Volkswagen is the second most bought company car in Sweden, something that would have been considered impossible just three years ago.

Volvo is often sold together with its former business associate Renault. This has made Renault the fifth largest make on the company car market, which is something of a sensation in a country where drivers used to say: 'The French and Italians can't make cars that can cope with the Nordic climate'.

But in neighbouring Denmark the situation is more typical of a European non-car manufacturing country. Taxes are high and neither Volvo nor Saab is in the top 10. Danes choose a German car, or even a French or Japanese model, but not a Swedish one. We already have a situation here where it can be very difficult building an international fleet agreement for a Swedish/Danish company, and that's just two countries next to each other.

But maybe the Danish situation is what it will be like in Sweden too, when companies and drivers don't feel as supportive of Swedish industries when driving a Volvo or Saab. Then it could feel more loyal to drive a European-produced car than feeding the American owners in Detroit. Then, at least the international fleet manager's job will be much easier.

  • Anders Odahl is editor at Swedish fleet consultancy Ynnor, telephone +46 (0)40 354878.
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