How are sellers dealing with tight inventories?
By guaranteeing we’ve a well-rounded choice of licensed pre-owned and used Volvos. Used automobile gross sales at my retailer final 12 months have been up 15 p.c from 2020.
Costs on used and CPO automobiles are astronomically excessive. However Volvo sellers are resourceful in buying used stock — we’ve among the finest CPO packages available in the market.
Volvo Automobile Monetary Companies is dedicated to maintaining automobiles within the supplier community. Volvo doesn’t enable its lease clients to commerce their car to a non-Volvo supplier. Volvo franchise sellers have first dibs on lease turn-in, firm car and demo items by way of public sale. Retaining the automobiles within the community provides us a aggressive benefit and helps construct our used-vehicle stock.
Sellers have additionally labored with their service clients and lease portfolios to accumulate used automobiles.
How do you anticipate gross sales incentives evolve as manufacturing and stock numbers seemingly enhance?
Shopper demand is robust for our merchandise. However Volvo is dedicated to providing gross sales incentives regionally, the place wanted.
Whereas different automakers may be taking their foot off the fuel with regard to advertising and marketing and incentives in occasions of scarce provide, we wish Volvo to maintain its foot on the fuel to stay related and aggressive.
How sustainable are present car margins and profitability ranges as stock improves?
Volvo should stability provide with demand. We should present restraint with manufacturing as soon as the availability scarcity is resolved. If manufacturing stays in verify and demand stays robust, margins will probably be maintained. But when we load up on stock, incentives might want to go up and revenue ranges will not be sustained.
Final 12 months, Volvo Vehicles CEO Hakan Samuelsson predicted a “new regular” of decrease volumes and better margins will emerge from the business’s present provide disaster. However is {that a} good factor for the model and its retailers?
The lesson we have discovered from these tough two years is that the days-supply quantity is crucial to our success and profitability. We hope Volvo will management the times provide and transfer from a push to a pull gross sales program. That helps maintain margins and retains floorplan bills from spiraling.
At the moment, car provide is simply too tight. The trick is determining that magic days-supply quantity that permits the automaker to develop market share whereas guaranteeing sellers do not need to resort to discounting to maneuver items off their tons.
How has the stock crunch affected Volvo’s lease quantity?
Sellers are involved that we could possibly be penny-wise and pound-foolish in adjusting lease incentives in line with provide. It might have critical ramifications down the highway for sellers, lowering repeat enterprise and a provide of used automobiles.
How are Volvo sellers dealing with new-vehicle pricing? Are they typically sticking to MSRP or including market changes?
Our focus is on sustaining a long-lasting relationship with the buyer, and all of it begins with clear pricing. I do not know of any Volvo sellers who’re marking automobiles up by the use of market adjustment. There is not any dialog on the advisory board stage of any sort of inappropriate pricing coverage happening by sellers.
Volvo introduced it will likely be an all-EV model globally by the tip of the last decade. Do you count on U.S. shoppers — who’ve been extra skeptical of the expertise — to totally undertake EVs by then?
Volvo sees the place the market goes to be in 5 to 10 years. I might quite be a part of a franchise that’s ready for the longer term than be a part of one which’s making an attempt to play catch-up.
EVs are already a part of the dialog within the U.S. Even within the South, adoption is rising. We’ve pockets, comparable to Austin, Texas, and Nashville which can be extraordinarily EV-friendly.
Whereas automakers go all-in on the expertise, it’s the shopper who will drive the bus. The 2 issues holding again EV adoption are sticker shock and charging infrastructure. Competitors will deliver affordability whereas the federal authorities helps drive growth of the charging community.
Ought to Volvo be versatile about its early 2030s deadline in markets such because the U.S., the place EV adoption lags China or Europe?
Volvo is dedicated to its electrification technique however has proven knowledge and adaptability with its resolution to maintain plug-in hybrids sooner or later product cycle. PHEV’s play an essential function in transitioning the U.S. buyer to an all-electric car.
How are sellers making ready their shops to promote and repair EVs? Is Volvo subsidizing supplier funding?
Volvo is adopting a phased funding strategy. Sellers will construct out in-store charging infrastructure and improve service division tools in three phases over the following few years. The velocity of the rollout will range by area. Sellers on the West Coast have a shorter turnaround in contrast with sellers within the Southern U.S. Volvo doesn’t plan to share the infrastructure prices with sellers.
What’s probably the most thrilling product coming within the new 12 months and why are you enthusiastic about it?
The sporty C40 compact crossover is a brand new frontier for Volvo. It isn’t your cookie-cutter, fundamental Tesla-type car. It’s a fully premium expertise. The response from shoppers has been nice on this car. Sport utilities have been our largest sellers.
Volvo will launch a U.S.-made flagship electrical crossover subsequent 12 months. What are you able to inform us about it?
It is a improbable product when it comes to design and expertise content material. It is going to be a high-volume car and a sport changer for sellers.
Constructing the model’s flagship electrical car in Charleston, S.C., demonstrates Volvo’s dedication to the U.S. market. It suggests we’re an essential a part of Volvo’s electrification technique.
Have there been any adjustments within the facility picture program?
The Volvo Retail Expertise picture program has modified the notion and the premium-ness of our model. Nearly all of the community has already been up to date to the brand new commonplace.
What’s Volvo doing to direct sellers on the digital retailing entrance?
Volvo has established an advisory group of sellers to function a sounding board for future digital retail requirements. The group is charged with ensuring any new requirements meet the wants of the buyer but additionally be in keeping with sellers’ wants and franchise legal guidelines.
What’s your opinion on factory-developed buying platforms?
Automakers are suppliers, not gross sales organizations. OEMs are strolling a tremendous line with franchise legal guidelines by doing consumer-direct platforms. Volvo’s place is to help its supplier community with entry to third-party digital instruments.
How tough has hiring and retention been for Volvo sellers within the present tight labor market?
In the course of the pandemic lockdowns, many dealerships let staff go. We didn’t put our foot on the brake. We did not let any of our workers go. If an worker was sidelined from work with COVID, they continued to obtain pay. That technique has been helpful for us.
Have you ever needed to make adjustments to pay plans and advantages to draw and retain expertise in the course of the pandemic?
We need to be certain that we’re greater than aggressive within the market. Earlier than the pandemic, we put our salespeople on wage, quite than commissions. Gross sales staff turned product specialists. It took away the stress of closing a deal and eradicated high-pressure gross sales techniques that flip shoppers off.
