For years, Volvo's marketing message was clear: It was a Swedish car company with a reputation for building safe, reliable vehicles.
But now the company has a brand awareness problem.
Volvo's once strong image has been weakened by a lack of marketing and long-term vision by the factory while it waited to be sold by Ford Motor Co. Volvo's position is also diluted by competition from other manufacturers that have made their own safety strides and are marketing them aggressively.
Mike DiChristofano, chairman of the Volvo Retail Advisory Board and co-owner of Volvo of Tucson, says he is excited about Volvo's new Chinese owner, Zhejiang Geely Holding Group Co., but adds that it is time for the owner to define an advertising and marketing strategy and then spend the dollars to back it up.
And, he adds, the parent company also needs to bring more Volvo products to the United States quickly and increase the number of vehicles its leases.
DiChristofano, whose stint as chairman ends next month, spoke with Staff Reporter Arlena Sawyers.
Q: How was 2010 for Volvo dealers?
A: It's been a tough year. Because of the buy-sell, we were in limbo for much of the year.
What will the big issues for Volvo dealers be this year?
To name a few, getting more marketing dollars for the U.S. market, getting more competitive in our leasing -- getting a higher leasing penetration -- and working on getting more products to market that we need.
For example, we need a replacement for our seven-passenger SUV, XC90. It's getting new products scheduled that we need to come to the U.S. market.
How much real contact does the retail advisory board have with Volvo management?
We have telephone conferences often, and I have full access to anybody at Volvo so they are very open; they are good with that. There are no barriers between me and getting in touch with anybody at the factory level, ever.
From a dealer perspective, we have good contact with our regional representatives. I think dealers feel that they have an avenue to get their concerns brought to the attention of the manufacturer.
How are Volvo dealers adjusting to having a new owner?
There has been zero interaction so far with our new owners. We've had good interaction with our new president, Stefan Jacoby. We've met with him numerous times already, but as far as the Chinese and the company Geely, itself and Chairman Li Shufu, we have not had any contact. So I'm not sure if there are any adjustments so far for dealers to have to make.
Are Volvo dealers concerned about that lack of contact with the parent company?
If you sample the dealers, you'd find some who'd like to hear from the Chinese, and you'd hear some say that Stefan Jacoby is running the company and he's the one we've had the most contact with and that is the most important thing.
Most important to the dealers is that we are looking forward to getting our direction -- long and short term -- from Stefan Jacoby.
On Jan. 1 Lex Kerssemakers became head of product strategy and vehicle line management, giving him a key role in the development of the next generation of cars from Volvo. Is that exciting news for dealers?
We haven't had enough interaction to know. I'm also on a committee called NAPAC -- the North American Product Advisory Committee. That group works with the manufacturer on the development of new products. So I have seen some of the future products and direction they want to go, and things look very exciting.
Our question here in the States is what is going to be the financial support to bring these products to market and how quickly will they get here?
We need -- yesterday -- a new seven-passenger SUV.
We do have an all-new S60 model -- we went a year without it -- which is part of the reason we struggled. The new S60 just came out, and we'll have our front-wheel-drive, high-volume variant of it coming in the first quarter of 2011, so that's new. The XC60 is new so we'll have a mid-sized sedan and a mid-sized SUV that are new. But from there, the important vehicle to us in the United States is a seven-passenger SUV. That's our bread and butter.
Are dealers satisfied with Volvo?
They are anxious right now because of the things I mentioned that are important for 2011 -- the increased marketing dollars, more leasing competitiveness and products.
Again, with the buy-sell going on there have been no good long-term decisions made and resources put behind them to create consistency for our brand.
So I think all dealers feel this brand has lacked a long-term vision and consistent financial support in the U.S. market.
Are Volvo dealers profitable?
It's too early to tell; I don't have the numbers.
Again, it was a tough year for dealers.
Do you expect to be profitable in 2011?
As far as 2011 goes, again it's going to be based upon the decisions Geely and Volvo are making right now about the financial support they are going to give us in the United States.
Are Volvo dealers making money on new-car sales?
From what I know about our business as a whole, most car dealers -- period -- do not make money selling new cars anymore. I don't have those numbers to know specifically whether Volvo dealership new-car departments are profitable, but my guess would be no, but it's purely speculation.
I think our volume levels with Volvo, unfortunately, are at a level that would not allow much profitability in the new-car department.
What are Volvo dealers doing to attract more service business?
Volvo is working with dealers on a subcommittee to have a program where we are going to be enhancing our warranty for putting in factory parts.
If you put in original manufacturer parts instead of the traditional one-year warranty on parts, you get a two-year warranty. The parts warranty, I think, is something that helps people choose Volvo parts at a Volvo dealership over going to an independent shop.
We're also creating initiatives to bring people in by offering free diagnostics and also free software upgrades for our computer modules. That will be a once-a-year visit for people mainly to come in and get checked out and see what upgrades they need on their computer software.
Again, the Volvo Retail Advisory Board has subcommittees. The one we're talking about deals with aftersales parts and service business. People from the board sit on that as well as other dealers across the country. I'm not on it.
What are Volvo dealers doing to attract more finance and insurance business?
I think they've worked on a couple of plans as far as selling maintenance and they have wraparound warranties that go over the new-car warranty, but I haven't heard of anything really new.
Is it difficult to get Volvo customers financed?
The traditional Volvo customer is a high-credit-score customer. It's not that they won't get approved. It's that they have to come with more information about themselves than they did in the past to prove income or whatever. It's a more cumbersome process.
What does the factory need to do to help you sell more vehicles?
If you ask dealers across the country, most of it ties into having a true captive financing source, which we don't have right now.
Has Volvo said anything about establishing a captive finance source for dealers?
I don't know where they are in the process. I know in the long term that's what this franchise will need.
What's missing in the product lineup?
A new XC90; that's imperative.