8:59 pm, October 20, 2009
VOLVO is planning to expand – but not before profitability levels have been addressed, a director has told Car Dealer.
Kevin Meeks, Network & Business Development Director at Volvo Car UK, told Car Dealer that growth has to be ‘organic’.
‘We’re at 103 sales sites at the moment and we’d like to expand that, but it has to be organic,’ he said.
‘We want to expand the network but don’t want to do that before the profitability is there and the volumes too.
‘If you look back a few years ago the Volvo network wasn’t making money, dealers were unhappy and the relationship was strained. But we put in place a plan to fix the individual problems one-by-one and our ratings in the NFDA survey show that it’s working.’
HAPPY DEALERS
Meeks said Volvo has taken a number of steps to keep dealers happy including looking at stock levels and demonstrator requirements.
‘I don’t want a dealer to be spending what I would call dead money. If they are spending money to build the brand or to sell a car, great, but if they are spending money to keep a car in stock or maintained it’s not doing anybody any good,’ he said.
The carmaker has also addressed interest charges as well as DMS requirements to help dealers in these tough economic times.
It has even come up with an innovative parts sharing scheme where dealers can borrow expensive servicing equipment when they need it, rather than every dealer having to shell out on the same tool.
‘We’re looking at working on the wider picture on what we can do to help,’ added Meeks.
MOVING UP
And he believes the manufacturer is certainly seeing the changes are making a difference to a once-strained dealer-manufacturer relationship.
‘In about 1996 we were 33rd of 34 manufacturers in the NFDA survey in terms of value of the franchise. It’s taken a while, but we are now up to 10th in the overall value of the franchise.
‘We’ve still got some work to do and the job will never be finished, but for dealers to say they’ve got that sort of relationship with us is evidence to me that we’re adopting the right sort of processes.’
