Volvo plans to roll out a 2.0 version of its vehicle subscription business, Care By Volvo. The question is whether the update will be enough to quell an uprising over the program brewing in Volvo's biggest market in the U.S.
The California New Car Dealers Association is asking Volvo to halt the Care by Volvo subscription service in the state after a review found what the association contends are violations of California franchise and consumer protection laws.
In a Nov. 30 letter to Anders Gustafsson, CEO of Volvo Cars of North America, Brian Maas, president of the California association, said Volvo is "directly competing" with Volvo dealers through the service and claimed that Volvo has illegally modified its franchise agreements with dealers.
Maas also wrote to Gustafsson that the variability of pricing of vehicles through Care by Volvo may "constitute illegal 'payment packing.' "
But the situation is in flux.
The updated version of Care by Volvo was recently reviewed with the Volvo Retailer Advisory Board and the feedback was positive and in favor of the changes, Volvo said in a statement to Automotive News. Volvo declined to disclose the proposed changes to the plan.
"Care by Volvo has proven popular with consumers and has attracted new customers to the Volvo brand," Volvo said in the statement. "Volvo Car USA has always had an open and honest dialogue with its retail partners about Care by Volvo and has recently completed a 12-month anniversary review of the program."
Matthew Haiken, Volvo Retail Advisory Board chairman, told Automotive News that the subscription program revisions are a step in the right direction but more work is needed to address dealer concerns. He declined to elaborate on the proposed changes.
"We, as retailers, know that we're at a pivotal point in our industry," said Haiken, dealer principal of Prestige Auto Group in East Hanover, N.J. "We want to protect ourselves and make sure that if we are going forward with subscription, we are setting up a truly thought-out, well-executed game plan that is a win for consumers, the dealers and the factory."