Volvo's online vehicle sales in the United States will resemble a lead-generating service, with shoppers selecting a model and putting down a deposit, the company's U.S. chief says. Customers will then go to a dealership to finalize the sale.
Volvo Car Group last week announced a major shift in the way it wants to sell vehicles, emphasizing online sales.
But the move does not signal a change in Volvo's U.S. dealer strategy, said Tony Nicolosi, CEO of Volvo Cars of North America. Volvo is "fully committed" to its U.S. dealer network and is not looking to shift to a Tesla-like sales model.
Nicolosi said the U.S. sales arm has discretion over how much of the European initiative it adopts. "It is a complement to our dealers' business, and it is a small subset of business," he said.
That casts the changes announced in Sweden as more moderate than portrayed in early reports, which said "Volvo will start to sell online gradually across the globe."
A Reuters report last week quoted Volvo sales chief Alain Visser as saying that Volvo wants to have "all our car lines in all our markets offered digitally," adding that "more and more of our customers are ready to buy online ... to avoid the hassle around negotiating the deal."
Worldwide, Volvo also said it will limit participation in auto shows to Detroit, Shanghai/Beijing and Geneva. But in the U.S., Volvo also will attend the New York, Los Angeles and possibly other auto shows, Nicolosi said.
New dealership standards announced by Sweden last week won't apply to the United States for a least a year because of concerns about dealer profitability, Nicolosi said, and they will be discussed next year with the dealer council.
"One thing I want to make perfectly clear," he said. "We remain committed and will continue to invest in supporting our dealer network."
Volvo wants a bigger online presence because consumers are using the Internet for many everyday purchases, Nicolosi said. Volvo tested a program this year by offering 1,927 special edition and well-equipped redesigned XC90 crossovers online with a starting price of $65,900. The new XC90 goes on sale in April in the United States; buyers through the test program will get their vehicles first.
It's now doing the same for four designer editions of the XC90 -- called Designer's Choice -- to further spur interest in the nameplate that's essential to Volvo's recovery. Buyers choose a style, put down a $3,000 refundable deposit and chose one of three dealerships. The sales price is not set.
The dealership gets the referral that Nicolosi likens to an Internet lead, negotiates price and offers financing and other F&I products: "This is a lead, and all we are doing is taking the lead and passing it on to finish the program."
Nicolosi said he could not detail how the program will work in other markets worldwide.
"Like in any organization you will have these worldwide initiatives," he said. "Then it is up to us to tailor the worldwide initiative to the U.S. market, which we have done."
Online ordering is growing globally, and some customers demand it, Nicolosi said. "We embrace that as well, however, and we remain committed to moving all of our retail volume to the retail network."
Bodil Eriksson, executive vice president for marketing, said online sales are "a tool to bring attention to a car not yet in a showroom."
Neither executive would say which models could be next for sale online.
As Volvo renews its vehicle range, U.S. auto shows will be vital, the executives said.
With seven product launches plus multiple derivatives coming in the next 41/2 years, "we will be present at the major auto shows in the U.S. to make sure those cars are represented," Nicolosi said.
He said Volvo Cars of North America is deciding how to deal with the global plan mandating a personal service technician for each customer: "Here in the U.S., we are still looking at the proof of concept. We have to see how it works."
Volvo is talking to its U.S. dealer board and will launch pilots in five dealerships by mid-2015, Nicolosi said.
U.S. dealership employees won't have to comply with the European mandate that they wear clothing designed by Swede Oscar Jacobson.
The parent company also announced requirements that stores serve customers drinks in Sweden-produced glasses and provide Swedish snacks. But Nicolosi said no decision had been made on whether those requirements would apply in the United States. He said, "If they help us sell cars, we'll look at them."