Volvo predicts 10 per cent of its new car sales will be through newly launched subscription service

Time 1 year ago

Volvo has taken the wraps off a new subscription service for its model range and reckons it will account for 10 per cent of UK sales next year.

Billed as the perfect financial product in uncertain financial times, Care by Volvo offers customers a subscription service that’s similar to Spotify.

It’s being rolled out from this week with packages starting from £559 per month for a Volvo XC40.

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Customers can choose a Volvo that’s in stock or spec their own online, select mileage between 6,000 and 24,000 miles a year, and then wait one month for delivery.

They can then try the service for 30 days for free, hand the car back with no charge or start their subscription.

The subscription lasts for as long as the customer wants it to and they can cancel with three months’ notice and not be clobbered with any charges. All costs including road tax and insurance are covered by Volvo apart from fuel.

Volvo says it will allow customers to stick with one car or switch between cars at any point, likely sparking interest for customers wanting to experience an electric model but hesitant to commit to one for a long period of time.

The roll-out of Care by Volvo follows a three-month trial by Volvo dealerships in London and on continental Europe.

The service is already live in Germany, the Netherlands and Norway.

Speaking in an online press conference, Magnus Fredin, Volvo Cars’ head of global online business, said: ‘Around 92 our cent of customers who use Care by Volvo are new to the brand. The average age of the customer is lower – 40 years. Less than one per cent of customers switch cars and less than five per cent switch after three months.’

Fredin added: ‘Some 70 per cent of customers did not visit the dealer and used the service online and 75 per cent choose not to configure their car.’

Conor Horne, head of Care by Volvo UK, said: ‘People want more convenience and want to buy online. Care by Volvo is the most reliable offering of its kind in the UK, making it the perfect financial product in uncertain financial times.’

Endeavour Automotive’s Volvo franchise director, Guy Twiselton, revealed the dealer group has received a 300 per cent increase in inquiries for short-term rentals since it reopened its showrooms on June 1.

‘Care by Volvo doesn’t change our role as a retailer – we’re there to help the customer make a decision and the right car.’

The subscription packages are cheapest on Volvo’s SUV range, starting from £559 per month for a Volvo XC40 T3 Momentum and rise to £1,299 for an S60 saloon Polestar Engineered.

Commenting on this, Horne told Car Dealer: ‘You can’t mix apples with apples here – the cheaper packages are available on more entry-level models, while our saloon cars are only available on higher-spec trim levels and are therefore more expensive.

‘This has been done because it’s reflective of residual values.’

Horne also revealed that off the back of data from Germany, the Netherlands and Norway, Volvo expects 10 per cent of its UK sales next year to be from subscriptions – up from a five per cent prediction pre-coronavirus.

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He also confirmed that there were no plans to offer subscription packages on nearly new or used models, and all cars used on the subscription programme will be disposed of via the firm’s Selekt used car programme.

If customer interest rises for a similar programme on used cars, Volvo will consider offering such a service.

Care by Volvo follows Jaguar Land Rover’s similar service called Pivotal that launched in July, as reported by Car Dealer.

James Batchelor's avatar

James – or Batch as he’s known – started at Car Dealer in 2010, first as the work experience boy, eventually becoming editor in 2013. He worked for Auto Express as editor-at-large and was the face of Carbuyer’s YouTube reviews. In 2020, he went freelance and now writes for a number of national titles and contributes regularly to Car Dealer. In October 2021 he became Car Dealer's associate editor.

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