GOTHENBURG -- Volvo CEO Hakan Samuelsson believes the industry needs to change the way it brings its products to customers. That is why the automaker debuted its Care by Volvo subscription service in 2017 and last year its stand-alone Volvo Car Mobility unit launched M, a new brand that will expand the company’s global mobility operations.
Volvo Car Mobility’s mission is to deliver an alternative to car ownership for urban and metro consumers while Care by Volvo provides customers use of a model such as the XC40 compact crossover, including insurance and maintenance, all for one monthly payment.
Although Volvo believes these services provide a big benefit, not everyone agrees. U.S. dealers in California have called Care by Volvo illegal and filed a petition to the state's department of motor vehicles to block it. According to Volvo, neither Care by Volvo nor M is facing any legal challenges from dealers in Europe.
Samuelsson said services such as Care by Volvo won’t work without support from the automaker’s retailers. “There is a very big misconception that the dealers are going to be told, ‘You guys can drop dead. We don’t need you anymore.’ That is absolutely wrong,” Samuelsson told Automotive News Europe. “In this new world we need them even more.”
Samuelsson believes that dealers that embrace Care by Volvo will extend their connection to the car and its owner for a much longer period than today.
“It’s wrong to just cash-in on day one and then have a two-year warranty and then someone else takes over,” Samuelsson said. “The dealer gets less and less service and sells fewer and fewer parts that way. We need to look at the profitability of the car over eight years or longer.”
He mentioned that length of time because it is expected that vehicles will remain in the Care by Volvo program for that amount of time.