Volvo Cars of North America is rolling out a facilities improvement program and will pay dealers who renovate as much as $500 per car sold for up to three years.
Tony Nicolosi, CEO of the U.S. sales arm, said the program will run for three years and is retroactive to Jan. 1 because some dealers began the improvements last year and some already meet the new standard.
In 2013, Volvo canceled a new facilities and variable margin program because of low sales and throughput, Nicolosi said. It has revised and reinstated the facilities program. "This is not a mandatory program - it is separate from margin," Nicolosi said.
The facilities plan, called the Volvo Facility Support Initiative, was announced to dealers last week and will be discussed at Monday's make meeting with more than 100 Volvo dealers expected to attend, he said.
Volvo has 306 dealers in the United States, and 47 - which account for 18 percent of the brand's volume - are compliant with the new program, Nicolosi said. Forty of those stores are stand-alone Volvo stores and seven have separate showrooms and service areas, he said.
About 15 to 20 dealers started to upgrade last year before the program was canceled, Nicolosi said. Another 42 dealers have signed letters of intent, he said.
Dealers that don't have exclusive or separate showrooms and service areas will be paid $250 per car sold if they upgrade, Nicolosi said.
"We would like to have at least 50 percent of our throughput doing the upgraded facilities - these are the larger and higher volume dealers," he said.
The new facilities program will give Volvo dealerships a consistent look. Facilities will have a cleaner appearance but still use the traditional white, blue and silver colors.
"We know that customers shopping in our newer dealerships rate us higher than shoppers in our older dealerships," Nicolosi said.
"The other thing is to support dealers who made investments - even during the difficult times. Some of those guys are at a disadvantage - they have increased their cost of doing business."
Nicolosi also reconfirmed Volvo's 2014 U.S. sales target of 65,000 units, up from 61,233 last year.