OM in the News: Product Life-Cycle and the Death of the Station Wagon

“Products are born. They live and they die.”  This we write in Chapter 5, Design of Goods and Services. And  so we sadly announce that the station wagon is dead.  At least this is the headline in today’s Fortune (Feb.15,2011). Volvo, the company most associated with station wagons for the past 20 years, will stop selling them in the US after moving just 450 in all of 2010 (an average of 2 per dealer).

The Ford Country Squire, pictured here, has been gone for some time now. It was the quintessential suburban family vehicle since World War II. If you had 3 kids and a dog, the wagon was almost standard equipment.

Product innovation, the gas crisis, and  the boxy look all took their toll on station wagons. In the 1980’s the minivan came along and stole the people-mover business. Then the SUV took over in the 1990’s with more cargo space, better seating, and 4-wheel drive. And in the 2000’s the crossover combined the best features of the minivan and the SUV.

Volvo, with annual sales overall of only 400,000 cars, never enjoyed the scale to support R&D on the new models or frequent style changes. The company was also slow to move production out of high-cost Sweden, and it never built cars in the US, its largest market.

Although BMW, Audi, and Mercedes still offer wagons in the US, they don’t call them that. The new terms are “touring”, ‘avant”, and “estate”, respectively.

Can the station wagon ever come back to life?  The 1976 Cadillac Eldorado was lionized as the last American convertible–until Lee Iacocca brought out the 1982 Chrysler LeBaron ragtop.  Researcher Kevin Kelly, on NPR last week, has made the claim that “no human  invention, no tool has totally vanished”.

Discussion questions:

1. Can you name any product that no longer is made anywhere in the world that was once popular in the US?

2. What did Volvo do to help doom its own vehicle sales?

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