Volvo will retain dealers Down Under

Volvo Car Australia will fly in the face of edicts from head office and retain traditional dealer sales of its fully electrified vehicle line-up. That’s the advice from Volvo Australia boss, Stephen Connor.

Late last year Volvo’s global boss, Hakan Samuelsson, announced the Chinese-owned Swedish brand would transition to a pure electric (Volvo’s term for battery electric) model range by 2030. As part of the announcement, Samuelsson stated the path to market for Volvo EVs would be exclusively online.

However, the way forward won’t be as black and white Down Under, Connor says.

Talking exclusively to carsales this week, the local Volvo boss laid out his plan for the next stage in Volvo’s electrification, which will see all Volvos sold Down Under from the middle of this year either mild-hybrid, plug-in hybrid or ‘pure electric’. And dealer sales will remain a “critical” part of the mix.

“The [existing] dealer network is really critical to our success… Actually, their collaboration and support are going to help us grow and also make sure we achieve the sales volumes.

“Now, there’s some technical difficulties [with selling directly online], so we will go to a bit of a hybrid route… It won't be the only route to market – it will be one of many because some people want to buy online, some people still want to go to the dealership and test drive the car.

“I don't believe in the short-term every customer wants to buy online and I don't think it will always be an online-only service,” Connor commented.

Samuelsson’s global announcement has already attracted the ire of US Volvo dealers. Connor doesn’t believe the same tension exists in this market.

“I think the company [Volvo Cars] would love us to sell direct, but we have to adapt. It based on the local NSC [national sales company] – like the US’ legal requirements, legal framework…

“We also have to be respectful that our [Australian] dealers have invested a lot of money in their facilities.

“For us to cut them out is not palatable and it's not something we want to do in the short, medium or long term,” Connor said.

“Also our customers are still going to need a dealer to help with the infrastructure… Where does the customer get a car? How do they get it delivered? How do they get it serviced afterwards? So, there is still a need for a dealer to help with infrastructure,” he said.

Connor ruled out a move to an ‘agency’ sales model a la Mercedes-Benz and Honda (“That's something that we will never do. It’s fraught with legal issues,” he said), but did suggest the way Volvo remunerated dealers could change.

He also stated Volvo’s local line-up would continue to be simplified. Some existing model lines would be reduced to single models and, in some cases, Volvo will offer “transparent” drive-away pricing on a limited number of variants and option packs.

“One of our fundamental commercial strategies is profitable growth, both for us and for the dealer network. Now, as long as we stay true to that, then absolutely our dealers are here to stay long term,” Connor told carsales.

“Yes, it [the path to purchase] will look different. It will feel different. It won't be a traditional wholesale to retail model, but they [dealers] are part of our growth…

“Not every customer wants to buy online so we've got to recognise that and we've got to be flexible in this market to satisfy the customer's desire and that's where this is all being driven from – being customer-centric first and foremost,” Connor stated.