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Bruce Newton11 Sept 2019
NEWS

Volvo subscription coming

Care By Volvo to launch here in 2020

Volvo is on-track to become the first automotive brand to launch its own subscription service in Australia.

Care By Volvo is already offered in the USA and Europe and is the subject of a dealer association protest in California. It is expected to roll out locally in 2020.

“Our intention is to launch here next year,” confirmed Volvo Car Australia managing director Nick Connor.

“It is something we are working on. We haven’t determined timing, but our intention is to launch it next year.”

Care By Volvo will go into competition against several third-party automotive subscription services in Australia that have business relationships with multiple auto brands.

The subscription business linked most closely to a specific auto brand here is General Motors-owned ride-share provider Maven, which offers Holdens through what it calls long-term rentals.

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Other brands such as Audi (via Audi On Demand), BMW (Access by BMW), Mercedes-Benz (Car2Go) and Porsche (Porsche Passport) have launched their own subscription services overseas, but none of them have come to Australia.

Most recently, Jaguar Land Rover this week signed up to supply new vehicles to a third-party car subscription provider in the eastern states, which is offering a new Land Rover Discovery Sport from $269 per week and a Jaguar F-PACE from $389/week.

The same provider also offers a range of used Toyota, Mazda, Holden, Ford, Nissan, Volkswagen, Kia, Honda, Audi, Mercedes-Benz, BMW, Porsche and Volvo vehicles available from as little as $120 per week.

As with other car subscription services, the factory-backed Care By Volvo outfit provides customers access to multiple vehicles for varying amounts of time. Most costs apart from fuel and tolls (such as registration, insurance, roadside assistance and maintenance) are covered by a regular fee.

In North America, Care By Volvo charges a monthly fee of about $US750 for a two-year subscription. Subscribers can swap vehicles after one year.

Other models can also be substituted for short periods, such as when needing more space to move more people. The subscription can also be paused, such as when the subscriber is travelling overseas.

“The attraction is definitely the flexibility. The ability to dip in and dip out, switch models when you need to,” said Connor.

“It’s not going to be for everyone, it’s going to be premium-priced because of the cost to create that degree of flexibility.

“It’s for people who are prepared to pay a little more for a lot more flexibility.”

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Care By Volvo was originally linked with the XC40 small SUV, but Connor said the Australian plan was to eventually offer the service with any model.

“We may test the market and our systems and processes initially with just one or two models, but our intention is to make a broad spectrum offer.

“The tricky bit is the mechanics of the offer, getting the right suppliers to support it, getting the right front-end, the right back-end. That’s work in process.

“There is a global project team working on Care by Volvo who are supporting us in that, so we are working with them to put it in-place.”

Volvo retains ownership of the subscription cars which can be rolled over for up to seven years to new customers for reduced rates as they age.

This is where the California New Car Dealers Association -- which represents 15 Volvo dealers -- is getting annoyed, because they are being cut out of the ‘sales’ process and losing an income stream.

But Volvo has recently modified the program to allow dealers to offer Care By Volvo cars as well. However, the California Department of Motor Vehicles is still investigating the program for violations of state franchise laws

“Volvo dealers are happy with it and they are happy with the model,” insisted Connor.

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