VOLVO Car UK has abandoned the time-honoured practice of auctioning ex-factory cars to its dealers for resale as dealer used car stock. It will now dispose of its executive-driven cars directly to customers through an online portal.

Under the new arrangement, called Volvo Cars Selekt Direct, Volvo dealers will have nothing to do with the transaction which will take place independently of Volvo Car’s retailers.

Volvo Car UK concedes that dealers will miss out on selling these cars but says the dealer network will still have the opportunity to service the cars, provide spare parts and presumably handle them when they are eventually traded.

The arrangement is yet another move by an OEM to cut into dealer revenues and profit centres.

It comes at a time when Volvo dealers in the UK are in the midst of investing in a CI premises upgrade called the Volvo Retail Experience on which at least one UK dealer is reported to have spent the equivalent of $A3.8 million.

The company says the cars are owned by Volvo. They include cars being turned over from the Volvo executive fleet as well as cars being turned over from the company’s Care By Volvo subscription service.

These nearly-new used cars, which are between three to 12 months old, are offered for sale on the Volvo Cars Selekt Direct website. Buyers can choose a car from a computer, tablet or smartphone and pay for it in an end-to-end online service.

The direct-to-consumer model bypasses dealers with Volvo arranging national delivery of the vehicles to customers. At present there are only about 40 cars in the site but this is expected to grow significantly.

Under the arrangement, when Volvo is finished with the cars they will have blemishes refurbished and be subjected to 150 separate “rigorous” quality checks. This work has been contracted out to British Car Auctions (BCA). The checks include the latest software upgrades.

The cars come with comprehensive factory warranty, 12 months roadside assist and prepayment of the next roadworthy (MOT) test.

Customers unhappy with a car for any reason can bring it back within 30 days or 1,500 miles.
Volvo Car UK said that the new service “was a blueprint for Volvo’s ambitious digital sales strategy”.

Volvo Car UK said the role of the UK retailer network in the new service would be to provide “all subsequent servicing, maintenance and repairs”.

Kristian Elvefors, Volvo Car UK managing director, rather revealingly said: “Strategically, our retail partners will remain central to our business in providing full aftersales support, including servicing, maintenance and repairs” (without mentioning new and used vehicle sales).

Meanwhile the Care by Volvo car subscription service attracted some 2500 online new vehicle sales in its first year; roughly 15 per cent of all Volvo’s retail sales and seven per cent of total new car sales in the UK .

The increased focus in online end-to-end sales follows announcements by Volvo Car that its entire global sales of a line-up of fully-electric vehicles will be sold online by 2030.

By John Mellor