VOLVO will join Mercedes and switch all sales to the agency model from next month, according to the manufacturer.
The move from a franchised arrangement with retailers to a direct sales model has been long trailed.
The company’s UK managing director hinted at the move for retail business as long ago as 2021 and has been operating direct supply for sub-sections of its sales since 2019 when it launched an online sales platform.
The Swedish brand agreed the new retailer contracts at the end of 2022, but has not set an exact date within June for the change and has already delayed the switchover from May, according to Broker News sources.
Volvo’s change follows premium rival Mercedes which started operating under an agency agreement at the start of the year with mixed results including significant drops in registration volumes.
The Chinese-owned brand does not use the word ‘agency’ to describe its direct sales model but does describe it as having “transparent and national online pricing without haggling”.
The change is part of a European move by Volvo with the UK being the first country to make the agency switch. Home market Sweden is set to be the second market to switch to agency.
Commenting on the ending of the franchise system for the Volvo network, Kristian Elvefors, Volvo Car UK managing director, said:
Evolving consumer needs are the driving force behind this change. We want to provide the best possible experience for our consumers, whatever their buying preferences. The transformation is being undertaken in close collaboration with our retailer partners and we are confident it will deliver an industry-leading buying process.
Announcing the upcoming change to the public, Volvo was keen to reassure buyers that while it would be closing its wholesale channel, it would not be closing dealerships.
It’s not yet clear whether the Volvo agency agreement will preclude operating with leasing brokers in the same manner that Mercedes has cut brokers out of its sales operations.
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Tristan Young is an award winning journalist with more than 25 years’ experience reporting on the automotive industry focussing predominantly on fleet and retail. As a self-confessed petrol-head, Tristan has a weakness for car classifieds. When he’s not writing about the automotive industry, he can usually be found outdoors with a small pack of border collies.
