Volvo Cars of North America has tapped Enterprise Rent-A-Car to help make customers' long waits for the new Volvo XC90 seem shorter and the crossover's launch go more smoothly. The plan also is likely to boost sales of the XC60.
Committed buyers of the seven-passenger Volvo XC90 can ease their wait for delivery by choosing a new five-seat XC60 from their Volvo dealer's inventory and renting it from Enterprise at a rate subsidized by Volvo.
The deal calls for Enterprise to buy the XC60s from customers' dealers immediately. After signing the paperwork at an Enterprise outlet, customers can take delivery wherever is convenient.
Enterprise will sell the XC60s back to the same dealers about six months later at predetermined depreciated prices. The arrangement is reminiscent of automakers' buying so-called program cars back from rental fleets.
Rick Bryant, executive vice president of sales operations at Volvo, said Volvo has pre-sold "roughly 4,000" XC90s. But with vehicles still arriving in the launch, a customer who signs up to buy one today can expect to wait 30 to 90 days for delivery, depending on specifications and trim level.
Automakers are always eager to keep customers in the fold as they await the arrival of a new or redesigned vehicle, particularly if the customer is getting out of a vehicle with an expiring lease or coming from a rival brand. Jeep and Porsche, for example, have used short-term leases to fill that gap.
Susan Lombardo, Enterprise senior vice president of vehicle acquisition, said providing interim rentals for lease customers who are between vehicles is a common business practice. But the strategic rental of specific vehicles in partnership with a manufacturer is a first for Enterprise.
"Let's say the customer's car is ready in two months -- you really don't want to create a two-month-old used car," Lombardo said. "The manufacturer likes our ability to take that vehicle back in fleet. We're going to rent it to other people and get you more exposure for that car. When it's due for de-fleet, it comes back to the dealer."
Bryant said the unusual arrangement is for all customers who have ordered an XC90 but was designed specifically for customers who are getting out of leases for competitive makes.
Neither Bryant nor Lombardo would say how much Volvo would contribute to subsidize the vehicle rentals.
Bill Wallace, owner of Wallace Volvo in Stuart, Fla., said Volvo is picking up a third of the monthly $900 tab for his customers to rent an XC60. Dealers have the option of subsidizing the cost even more, he said; he will chip in $300 to trim his customers' monthly rental cost to $300.
He said it is a "fantastic" program and worth every cent to keep the customer happy and in the fold.
"There are people who are going to be disappointed that they are 10th on the list," he said. "This is looking very much like the Corvette situation where we could sell hundreds of these cars."
Bryant said while Volvo doesn't have a seven-passenger alternative to offer customers until the XC90, there are many people who would be happy with another SUV in the interim, and the XC60 fills the bill.
"In the best situation, there was going to be a period where customers would need to wait," he said. "This was specifically designed for drivers of competitive vehicles who perhaps have leases that are coming to termination and they need transportation. They would have to make a decision other than XC90 -- even if they want XC90."