Volvo has postponed a deadline for some of its dealers to provide exclusive Volvo showrooms, service areas and personnel.
Many dealers howled when Volvo Cars of North America Inc. unveiled its Plan 2000 program late last year, demanding exclusive franchises from dealers in major markets.
Eager to hear more, dealers jammed the make meeting at the National Automobile Dealers Association convention and spilled out into the hall.
'Volvo is playing hardball,' said Robert Vancavage, executive vice president of the New York State Automobile Dealers Association.
The state dealer association and NADA think Volvo's new demands violate the existing dealer agreement, according to a letter Vancavage sent Volvo last month.
Dealers were mum after the meeting, except for a couple of exclusive dealers who already meet the standards. 'I think we should all be exclusive,' said Ray Ciccolo, president of Boston Volvo Village in Boston.
About 135 exclusive dealers already meet most of the new requirements, but about 100 duals do not, said Brad Bowers, vice president of franchise development. Another 115 dealers in small markets also will get stricter standards, but they can stay dualed with other makes.
Volvo has paid higher dealer incentives for exclusive dealerships since 1996, and has paid bonuses for customer-satisfaction scores since 1992. Those two programs combined have paid dealers a total of more than $300 million.
'We have been working on providing this exclusive customer experience for some time,' Hans-Olov Olsson, president of Volvo Cars of North America, said after the make meeting.
'We have got to take the last steps with the dealers, just like we took the first steps,' said Mark LaNeve, vice president of marketing support.
Jan. 1, 2000, was the original deadline for dealers to meet the Plan 2000 requirements or face possible termination. At the make meeting, Volvo said it will give some dealers until the end of 2000. Volvo will notify dealers in the next couple of months which deadline applies to them, Bowers said.
He said postponing the deadline does not mean Volvo has backed down. 'In striving to achieve our business objectives, we have to balance our priorities. We will prioritize markets, and dealers, on a case-by-case basis,' he said.
Volvo will apply the earlier deadline to big markets with the most room to improve, LaNeve said. 'If a market has only one dealer who doesn't comply, why should we concentrate a lot of time and resources on that?' he said.