Abstract

Safe Before Green! The Greening of Volvo Cars 1970s-1990s

While the automobile industry has served as the backbone of much business history scholarship, business historians have given little attention to the automobile industry’s actions to deal with the complex of environmental issues that took hold from 1960s on. Volvo represents a captivating case to study to provide insights about why the growth of the automobile industry has been difficult to align with a shift towards environmental sustainability. While Volvo pioneered the exhaust emissions control technology in the US market in 1970s and obtained an international reputation of high environmental and safety standards in the decades to come, the company proved not able to address climate change in the 1990s. The article identifies several key factors impacting the weak response to the environmental issue in the automobile industry, such as weak and asymmetric emission control regulations in international markets, consumer preferences for larger cars (SUV) in the 1990s and a lack of systematic regulatory pressure to shift from fossil fuels and the internal combustion engine. In the case of Volvo, world leadership in safety standards, rather than low carbon emissions, constituted Volvos competitive advantage as the climate change debate took hold in 1990s.