Dialogue with Yuan Xiaolin from Volvo: Luxury is not just a pile of parameters; car companies must be responsible to users

Author | Zhou Zhiyu

Editor | Zhang Xiaoling

Since the beginning of this year, the automotive industry has been rapidly advancing towards "universal intelligent driving," while Volvo appears to be quite different.

At the press conference on the evening of April 15, the speeches from Volvo's management team revolved around one key word—safety.

As the industry races to countdown to the implementation of Level 3 autonomous driving, Volvo's response is particularly calm. Yuan Xiaolin, Global Senior Vice President of Volvo Car Group and President and CEO of Volvo Cars Asia Pacific, stated at the communication meeting with Wall Street Insights, "The question is not whether to do autonomous driving, but how to do it, who will do it, and how it will be done."

This statement injects a dose of sobriety into the heated automotive industry.

"Volvo will never intentionally or unintentionally blur the lines between convenience features and active safety." Yuan Xiaolin's remarks stand in stark contrast to the strategies of many car manufacturers eager to compete in the market with computing power and chip parameters. In his view, safety is Volvo's "lifeline," and any technological breakthrough must be predicated on "responsibility for life."

Regarding the current popularization of intelligent driving technology, Yuan Xiaolin's viewpoint is that breakthroughs in technology should be based on a strong emphasis on safety.

Such technological breakthroughs cannot simply rely on redundancy to enhance safety thresholds. Yuan Xiaolin cited the AEB (Automatic Emergency Braking) technology as an example, stating that the AEB high-speed braking function will be activated when the vehicle speed exceeds 4 km/h, and it can avoid collisions at relative speeds below 60 km/h; at higher speeds, it can mitigate the severity of collisions.

Can it be achieved to stop at a speed of 100 km/h? Of course, but the cost would be adjusting the sensitivity to a very high level, which means the threshold for triggering conditions would be very low, leading to a significant occurrence of "phantom braking," which poses a danger to driving safety.

Yuan Xiaolin pointed out that achieving certain performance or parameters is relatively easy, but developing a systematic solution that meets the vast majority of real-world scenarios is actually very difficult. Car manufacturers must be responsible to users and contribute positively to society; whether individuals or enterprises, they should be people-oriented, respect life, and innovation should not come at the cost of disrespecting life.

When Volvo invented the three-point seatbelt in 1959, it took humanity thirty years to complete the cognitive revolution for this technology to become globally popular; today's intelligent revolution requires more than just technological breakthroughs.

In Yuan Xiaolin's view, while technological breakthroughs are indeed important, the ambiguity of responsibility may trap users in a "trust trap"—if car manufacturers overly embellish the capabilities of driver assistance features with marketing language, it may lead consumers to misjudge the system's capabilities, thereby creating safety hazards.

As for when advanced intelligent driving features will be launched, Yuan Xiaolin's answer is that Volvo will be very cautious. In his view, once Volvo announces relevant technology, it will send a clear signal to society. Consumers, due to their trust in the Volvo brand, will believe to some extent that autonomous driving technology has matured. This trust is backed by Volvo's 98 years of historical credibility, so Volvo will treat this with particular importance and caution However, in the new era where electrification narrows the power gap and intelligence reshapes the experience dimension, how should traditional luxury brands maintain their brand value? Yuan Xiaolin believes that luxury is not just a pile of parameters; the price of luxury brands comes from the balance of brand strength, product strength, and operational capability, which is a long-term process.

Yuan Xiaolin provides a clear definition of Volvo's luxury perspective: safety, health, and sustainability. These three keywords have run through Volvo's 98-year history and continue to be reflected in the all-new XC90.

In the large SUV market, the parameter war and configuration war have led to consumer aesthetic fatigue. Volvo has chosen a differentiated path: embedding safety genes into the product's underlying logic through architectural design, material selection, and manufacturing processes.

For example, in the XC90's body structure, 33% boron steel cage structure and a large amount of high-strength boron steel are used, with a tensile strength of up to 1600Mpa, far exceeding the industry average; the in-car air quality control system eliminates harmful volatile substances from the source. These "invisible costs" are precisely the core of Volvo's brand moat.

From Nordic minimalist design language to the comprehensive application of environmentally friendly materials, from in-car air quality management systems to the forward-looking design of child safety seats, Volvo aims to convey not only the value of transportation but also a lifestyle of "reverence for life."

This strategy creates a unique moat in the market. Yuan Xiaolin admits that Volvo's user group does not simply pursue cost-effectiveness but rather identifies with the brand's values. In the fiercely competitive luxury car market, this "brand faith" has become Volvo's differentiation weapon.

In the face of fierce competition in the Chinese luxury car market, Yuan Xiaolin's confidence comes more from "system strength." He revealed that Volvo is reconstructing user relationships through digital services (such as online transparent processes) and full lifecycle management. This "service as product" mindset may redefine the user value of luxury cars.

In terms of consumer relationships, Volvo has strengthened the user service experience, launching "transparent consumption services," allowing users to trace all car purchase information and consumption records through the Volvo Car App, enhancing consumers' purchasing experience and trust.

As the industry races down the path of intelligence, Volvo chooses to anchor on "safety" and build a technological moat with a "slow" mindset. In conversations with Yuan Xiaolin, one can see his clear criticism of industry bubbles and his confidence in the brand's future.

In the era of intelligent electrification, safety remains the non-negotiable bottom line of luxury. What Volvo aims to do is to make every technological leap a tribute to life.

The following is a dialogue between Wall Street Journal and Yuan Xiaolin (edited):

Q: Volvo started researching intelligent driving technology early on, but has always been very cautious. Now many car companies have announced timelines for L3 implementation; does Volvo have such a timeline?

Yuan Xiaolin: Objectively speaking, the development of autonomous driving technology will have a long development process in terms of vehicle-road-cloud collaboration and various other logics In Volvo's view, there are several issues regarding (autonomous driving) that need to be clarified and cannot be vague: Who is responsible? Is it the person or the car? This must be very clear. If it is the person who is responsible, then it is a convenience feature, and this must be made clear.

For example, the driving assistance feature, which Volvo started implementing in 2014. Many friends say, you already have it, why don't you promote it? Many things should be promoted, but if you cannot ensure it 100%, promoting it may lead to misunderstandings. If we do not take a cautious attitude, a life could be harmed due to such misunderstandings, which contradicts our values. At Volvo, we will never intentionally or unintentionally confuse the distinction between convenience features and active safety.

It is possible to achieve high-level autonomous driving through the combination and experimentation of convenience features and active safety features. In the current environment, everyone is particularly eager for the emergence of new technologies to be applied and to have an impact. However, when new technologies are not mature, they may pose potential dangers. Therefore, the question is not whether to do it, but how to do it, who will do it, and how it will be done. Volvo believes that the entire industry needs to participate together, advancing with safety as the bottom line.

Regarding when high-level intelligent driving features can be launched, Volvo will be very cautious. Because once we announce related successes, it will send a clear signal to society. People will trust the Volvo brand and, to some extent, believe that autonomous driving technology has matured. This information is backed by Volvo's 98 years of historical credibility, so we will treat it with extra caution and seriousness.

Question: From the current convenience features to the next step to L3, it is a competition of computing power and chips. How will Volvo continue to lead in active safety in the next phase?

Yuan Xiaolin: I believe intelligent driving can be broken down into two parts: "intelligence" and "capability." Intelligence is the ability to make judgments and choices; capability is the ability to translate ideas into actual actions. The Chinese market is currently a high ground for intelligence, with various solutions and partners. This is the strength of the Chinese automotive industry's industrial chain, possessing a complete value chain. I believe the implementation of intelligent driving in the future is not a problem. However, besides implementation, there is also the question of how to "sell" it. Is it overstated? Is there any misleading information? Will there be blame-shifting if problems arise? These need to be faced with a sincere attitude by the entire industry.

From Volvo's perspective, we hope to build on our solid foundation and advantages, with an open mindset and wise judgment, to combine China's advantages in the field of intelligence and industrial chain to realize the future of intelligent driving.

Question: Regarding intelligent driving, from the consumer's perspective, if one day the choice is handed over to them, should there be some thresholds set, and an educational process to ensure safety? Will designers and manufacturers implement some redundant designs similar to passive safety?

Yuan Xiaolin: (Intelligent driving) currently has various solutions, some with redundancy measures, some utilizing AI, and some with vehicle-cloud-road collaboration. Everyone is working hard in their respective directions. Volvo still maintains the same attitude, hoping to make technological breakthroughs based on respecting life and valuing safety We believe in this hope, but remain cautious.

Regarding education, Volvo's attitude is to enhance safety awareness in intelligent driving, as both enterprises and all sectors of society should take on greater responsibility. The original intention of intelligent driving technology is to liberate people and serve them, so it is best not to impose any additional burdens on consumers.

When it comes to redundancy, caution is necessary. For example, the AEB (Automatic Emergency Braking) function activates when the vehicle speed exceeds 4 km/h and can avoid collisions at relative speeds below 60 km/h; at higher speeds, it can mitigate the severity of collisions. Can it stop at a speed of 100 km/h? Of course, but the cost would be adjusting the sensitivity to a very high level, which means the threshold for triggering conditions would be very low, leading to a significant occurrence of "phantom braking," which poses a danger to driving safety.

Q: The prices of luxury cars are quite competitive now; how does Volvo respond?

Yuan Xiaolin: A car is not a one-time purchase; it marks the beginning of a true long-term relationship, and Volvo has been enhancing its service capabilities. Before the acquisition, Volvo's automotive services already had a relatively complete process, but over ten years ago, most were paper-based and scattered. Now we have made it online, systematic, and transparent, which is a benefit brought by technological advancement. This is an example of how we have been continuously improving, keeping pace with the times, with the aim of providing users with more efficient, considerate, and convenient full lifecycle services, which will also build users' trust in Volvo.

So, where does the price of luxury brands come from? It is the balance provided by brand strength, product strength, and operational capabilities; it is a long-term process. Over the past decade, Volvo has put significant effort into building this capability, so we have strong confidence.

Q: How do you evaluate Volvo's performance in China over the past 15 years?

Yuan Xiaolin: As a brand with a deep heritage, Volvo has encountered new historical opportunities in China, transforming it into a second "local" market.

Volvo has seized the development trends of the Chinese market, achieving good layouts in both manufacturing and commercial sectors, while keeping pace with the times, utilizing digitalization and intelligence to continuously improve and enhance the existing system, laying a solid foundation in the Chinese market. Volvo's market share in Europe is 2%, and we should aim for this target in the Chinese market, continuing to build on the foundation laid over the past 15 years.

By 2025, with our "Seven Swords Descending from Tianshan" in products, we will continuously enhance product strength and strive to reach new heights based on the existing market foundation.

Q: What are some considerations behind Hakan's return as CEO?

Yuan Xiaolin: Regarding Hakan's return as CEO, we have stated clearly in our press release. Different stages of corporate development face different challenges, and I trust the decisions made by the board of directors.

A few days ago, Hakan mentioned three keywords internally: will power, curiosity, and respect. One must have the will, possess strong capabilities, and be eager to act; Be curious about changes, have patience, and maintain an open attitude to explore these things; respect changes, respect the rules, and solve challenges step by step.

These are all about corporate culture and provide many insights for us to face such drastic external changes and competition from a conscious level. I believe that under the leadership of such an experienced CEO, our ship can continuously break through the storms and achieve sustainable development