Midway through 2018, representatives from Volvo's dealer network and captive finance company met with automaker executives to discuss underwhelming finance and insurance performance in dealerships.
The meeting was part of ongoing conversations in the automaker's profitability forum, which was created in 2017. Headed by Volvo Cars of North America CFO Ola Sjölander, the forum is made up of about 12 Volvo dealership representatives and CFOs who hold monthly sales calls and meet quarterly.
According to TJ Prayner, vice president of sales and marketing for Volvo Car Financial Services, Volvo dealerships' average F&I profit per new vehicle retailed was a staggering $478 lower than its luxury competitors, for an average $709 per vehicle.
"That was very glaring to us," Prayner said.
The captive finance company dove deeper into F&I performance at the retail level, and determined part of the problem came from a lack of process. Of the 289 Volvo dealerships nationwide, just over a third were still using paper F&I product menus, Prayner said. Forty-three dealers weren't using an F&I menu at all.
However, 55 Volvo retailers were using a digital menu through F&I tool provider Darwin Automotive, Prayner said, and achieved higher F&I profits than those that were not.
"We reached out to Darwin and said, 'How can we partner to bring Darwin more into the F&I offices within the Volvo dealerships, and how can we work together to expand the income potential outside of the F&I office as well?' " Prayner said.