Anders Gustafsson, CEO of Volvo Car USA, told dealers Saturday to "take a breath" over subscription services.
The company's North American leader opened the make meeting with the message that Volvo isn't backing away from its commitments to the dealers.
Less than two weeks ago, the California New Car Dealers Association, filed a petition with the Department of Motor Vehicles to halt Care By Volvo, the brand's controversial subscription program. The association, which represents 23 Volvo dealers in the automaker's biggest market in the U.S., says Care By Volvo violates state law meant to prohibit manufacturers from competing with their franchisees.
A launch date for a 2.0 version of the vehicle subscription business has yet to be determined.
Matthew Haiken, chairman of the Volvo Retail Advisory Board, said dealers still have time to talk through the program with Volvo to make sure it's sustainable for their businesses.
"He's not nervous about lawyers — he's nervous about hurting the relationship with the dealers," Haiken said of Gustafsson.
Haiken, general manager of Prestige Volvo in East Hanover, N.J., one of the largest Volvo retailers in the U.S., said Gustafsson "started off the meeting saying 'We will deliver what we promised.'
"Going into subscription, it's so important that Volvo Cars doesn't copy what everyone else does. We need to stick out and we need to be different and we need to do it together."
The updated version of Care by Volvo was recently reviewed by the Volvo Retailer Advisory Board, and the feedback was positive, Volvo said in a December statement to Automotive News.
Volvo dealers are also concerned about parent company Geely's electric performance Polestar brand and its subscription-only sales model.
Liza Borches, CEO of Carter Myers Automotive in Charlottesville, Va., said Gustafsson worked to quell fears about where the Chinese brand would fit in Volvo's portfolio.
"I don't think we have all the answers yet, but I do believe that Volvo is trying to communicate well with the dealers to make sure that we are partners for the future," Borches said.
Volvo also emphasized to its dealers the positive growth the brand has seen in the past two years. Haiken said U.S. retail business increased 46 percent in the past two years. Even with headwinds from tariffs in 2018, Volvo sold 98,263 vehicles last year, up 21 percent from 2017.
"It's one of these external forces coming out the Volvo Car group that scares us, but when we sit down and we have a conversation, I think everyone breathes," Haiken said. "We've got some time, let's discuss it, but let's prioritize by having an amazing 2019, selling more than 100,000 units and making money."
