1:09 pm, March 2, 2021
Volvo’s UK dealer network is ‘more important than ever’ as the Swedish company pivots towards being a pure-electric, purely digital car brand by 2030, bosses have told Car Dealer.
Volvo announced today (March 2) it will only sell pure-electric cars from 2030 onwards and all electric car sales will be handled exclusively online.
From 2030, Volvo’s UK dealer network will ‘effectively’ operate an agency sales model as customers transact with the manufacturer while the dealer will handle the customer service.
‘For a period of time, we will have the traditional wholesaler approach for the majority of our vehicles and as we launch new products they will come through the direct sales route,’ Volvo UK’s network and business development director, Mark Cox, told Car Dealer (in the interview which you can watch at the top of this story).
‘Over this period of time, in effect, the new car business becomes an agency-style handling model.’
This isn’t end of the Volvo retailer as we know it
Despite the dealer’s role changing, Volvo’s UK dealers ‘have never been so important’, according to Cox.
He said: ‘Yes, the relationship changes, but crucially the role of the retailer is now more important than it ever has been.
‘We are looking to grow our volumes overall and while we are talking about direct online sales, we are allowing customers to interact in ways they choose to.
‘There will be many customers who still choose to come to one of our fantastic retailers and transact in much the same way as they do so today – speak to product experts and drive the car.
‘There will also be others who want to sit at home or at work with a cup of coffee and do the entire transaction online and have the car delivered to them.
‘Crucially, the retailer is involved right the way through as all of that is fulfilled through the network. While the transaction is direct with Volvo, the retailer is there supporting the customer.’
Dealers have been ‘reassured’ that they remain a key part of the new sales model and the shift towards a digital strategy will allow them to focus on customer service, Waylands Automotive CEO John O’Hanlon told Car Dealer.
‘We have been reassured that retailers are central to the model, we can sell “online” from the showroom and all such online sales will still be delivered via the existing dealer network,’ he said.
‘The benefits of price transparency, cost reduction to dealers and our ability to focus more on delivering a fantastic experience allows us to embrace this change.’
O’Hanlon added: ‘By introducing the change using new model launches allows the strategy to develop over the next 10 years without one big bang moment.’
The firm’s UK managing director is adamant the days of the Volvo dealer are not numbered.
‘This isn’t end of the Volvo retailer as we know it,’ said Kristian Elvefors, Volvo UK MD. ‘We will see a lot of change in the network. We are absolutely convinced we will grow the brand in the UK and grow our new and used car sales.’
Dealers’ days not numbered
Elvefors hinted Volvo will be adding more dealers to the current 95-strong UK network, but the dealers have to be ‘entrepreneurial’ and the company has to make sure there are profits for both sides.
‘We have 95 sites and we are always evaluating whether this is the right number,’ he said. ‘Going forwards, I feel as though we don’t have too few – we are in a good shape and where we should be.
‘For the future, we need to continue the quite small investments – the retailers need to continue investing but they also need to earn some money so we need to ensure there is return on investment.
‘We need to have entrepreneurs willing to invest in the brand and they get paid for the investments as we transform the business model. But, if we don’t have entrepreneurs willing to invest, we will have a problem.’
Elvefors added: ‘We need to work together for profitable dealerships, but we also need to look at distribution and cost of stocks, systems and customer journeys. Also how we can deal more cost efficiently and more hassle-free, and taking care of customers in a more digital way.’
Car subscriptions strong
Purely online car sales will be incorporated into’s Volvo’ ‘Care by Volvo’ operation.
Launched last year, Care by Volvo currently handles the brand’s car subscription offering with all-inclusive packages starting from £559 per month.
Cox said car subscriptions currently account for eight per cent of Volvo UK’s total sales – a little off for the predicted 10 per cent Volvo said it was targeting.
Volvo expects to this to only grow as it launches more electric cars as the car subscription model is appealing to customers considering an EV, said Cox.
