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Volvo keeps faith in bricks and mortar dealerships

Early adopters: The global allocation of Volvo’s XC90 First Edition sold out in 47 hours.

Despite online success of XC90 First Edition, Volvo looks to improve retail offering

5 Aug 2015

VOLVO Australia sold its first ten XC90 SUVs in less than two days – and not one customer needed to speak with a dealer to secure it.

The ten were Australia’s allocation of Volvo’s First Edition XC90, a commemorative version of the company’s new SUV that was limited to 1927 examples worldwide (commemorating Volvo’s founding year), with all sold online within 47 hours.

Available either in petrol or diesel, the limited-edition car was sold only in one colour (Onyx black) and one chassis combination (air suspension and 21-inch rims). The sole interior available was amber nappa leather with walnut inserts and charcoal trim, while numbered plates and badging designated its rarity.

The car was listed prior to going on sale at $120,950 before on-road costs, with customers required to place a $3500 deposit at the time of ordering.

“Our allocation sold within 42 hours, and we had to go begging for more,” Volvo Australia managing director Kevin McCann told GoAuto at the launch of the XC90 in Canberra.

“We did it slightly differently than the rest of the world we measured the sale when it was actually consummated in terms of an exchange of contracts and deposits.”

Despite the online success, Mr McCann doesn’t see a rush to online retailing for cars happening just yet. He has, however, commissioned a report into how the role of the Volvo dealer will change in coming years.

“The dealer’s role is being influenced by the way customers pre-inform themselves before they get to a dealership,” he said.

“No longer do they arrive at the front door and say, ‘what am I going to buy?’ They come there with a pretty good idea of what they want to buy, and then they need be engaged in how they go about buying it.

“Is it more important to have more demonstrators in stock? Is it more important to have all of the aftersales functions there, such as finance and insurance, rather than product presenters and so on?” Mr McCann does not forecast any change to the number of Volvo dealerships around Australia, but anticipates the existing 30 dealerships will adopt a new global presentation standard called Volvo Retail Experience, which is currently being rolled out worldwide.

He denied that Volvo was following in the path of companies like Audi.

“It's very Volvo,” he said. “It's not a copycat or a ‘keeping up with the Jones’ scenario compared to the other brands. It's a clearly defined set of standards in terms of architectural features, colours, tones, fabrics and materials.

“The other aspect is the way the salespeople behave and conduct themselves within the environment, and the general ambience that we try and create.”

While the number of dealers will remain at the current level of 30 nationwide, Mr McCann has put underperforming outlets on notice.

“We're never completely happy,” he said. “We've got some dealers who get their target or better every month, and we're very happy with them. We've got other dealers who are a little less consistent and we know we have to work closely with them to build a degree of consistency.

“There are fortunately for us, just a few dealers who are a little bit under the expectations. And of course, in any sense, we'll always try and work with them first.

“Looking for a new dealer in this day and age, you're going out to ask someone to invest some millions of dollars in what you want to do. And it's usually easier to discuss that with an incumbent than a new entrant.”

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