VOLVO’s 100 UK dealers are currently going through large scale refurbishments to accommodate the Swedish brand’s new Corporate Identity, a process which should be complete by the end of next year.
This has been the cause of some network angst, reflected in last year’s NFDA Dealer Satisfaction index in which Volvo slipped down the order – but this has been a blip in what has been a highly successful few years.
However, Managing Director John Wakefield said things are getting better. He said: “While we did not do as well as we would have liked in the last NFDA dealer satisfaction index, we have just had a very good dealer conference.
“We have come a long way in the past four years and pushed a lot of cost onto dealers. But there had to come a time when cost is overtaken by revenue and we passed that point in the third quarter of last year – just after the NFDA survey.
Dealers were clear that they didn’t like increased targets we imposed on them to meet production and they also told us that despite our success we don’t become too arrogant. We are listening, we don’t want to be a dictatorial brand.”
Wakefield has been MD at Volvo Car UK since 2016 having joined the company four years earlier as Sales Director. During that time he has overseen the most successful sales results for a quarter of a century, rising from 30,000 vehicles a year in 2013 to more than 50,000 last year.
This gives the brand more than 2% market share, its best performance since the early 1990s. The plan now is to head north of 600,000 with a new XC40 B-segment SUV on its way which Wakefield believes can easily add 10,000 sales.
He added: “We cover 58% of the market with our current portfolio with V40 accounting for 26% of sales although numbers are in decline as the model runs out.”
The brand is also well prepared for the downturn in diesel. Wakefield said: “In 2013 almost 98% of our sales were diesel and that mix has now dropped to 57% with the rest petrol and hybrid – we have very credible petrol and hybrid options for our large SUVs.”
As Volvo ramps up its electrification plans, Wakefield said that every dealer will have charging points on site as part of the network refurbishment plans.
Currently the sales mix is around 50% fleet and retail. Wakefield said Volvo will put more focus on retail as lines become blurred. He said: “There is a broad definition of fleet, a company car is increasingly a personal choice so we will refocus on how we do things in that area.
We had a large database of corporate customers who we weren’t doing very much with. We have now put that database to use and we have introduced 600 new corporate customers. Also the XC40, which has largely been retail, we expect to appeal more towards fleet.”
Online sales is another project and Volvo UK will launch a full online purchasing platform in April which will include configuration, stock, part-exchange and finance whether it be cash, finance, PCH or PCP.
Wakefield said: “The general consumer is increasingly happy to buy online and the UK is the most prolific online market in Western Europe.
“However, the dealer will still play to final role in terms of PDI and delivery as well as ongoing service and customer retention.”
An addition to the Volvo family will be the introduction of Polestar 1, a fully electric brand which will be sold direct to customers online or through a very small number of boutique-stye “spaces”, initially in London, Birmingham and Manchester.
Polestar 1 is very much a teaser model, with a very small production run of a few hundred and in left hand drive only. Polestar 2 will be aimed at larger numbers and is due in 2020.
The Volvo network will operate the ‘spaces’ and will provide back up in terms of PDI, delivery and service.
Finally, on Brexit, Wakefield said: “People are being very cautious in their purchasing decisions ahead of March. Prices might go up, but we are still planning for a successful year.
“We already have plans in place to deal with changing customs regimes at our points of entry into the UK and we are ready with all the necessary paperwork.”
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