Volvo Car UK chief executive Kristian Elvefors has informed the Swedish carmaker’s dealers of a three-month postponement to its planned roll-out of agency model new car retail.
Retailers had been told that the new direct-to-consumer distribution model could be implemented as early as April, but Volvo has followed Stellantis in stalling its plans to transition away from a franchised car retail model and now expects to roll-out the new system from June 1.
AM reported back in November that Stellantis retailers were “over the moon” at news that its agency model roll-out had been put back from July this year to January 2024.
The UK is set to be Volvo’s lead market for the implementation of the new agency model, which will see retailers receive a fixed handling fee for completing new car sales.
Giving his update on its planned implementation in a letter received by retailers on Friday (January 27), Elvefors said the brand was “making great progress with our new car agency strategy”, with all partner agreements signed and returned at the end of last year.
He added: “We committed to keeping you fully informed and only transitioning when all material and constituent parts of the programme are fully tested and operational.
“Having informed the DTC (Direct-To-Consumer) working group, we believe it appropriate to recalibrate to a revised commencement date of 01 June 2023.
“Launch timings for such a significant project must remain subject to change however, as the project gains momentum.”
One Volvo retailer AM spoke to about the agency model roll-out expressed concern about OEMs’ move to ditch a franchised car retail model which had served the sector so well in the past.
“My concern is that there are people making decisions within the car manufacturers that have only been in office for maybe three years and they are the people making decisions having never seen a normal pre-COVID market,” he said.
“If Volvo’s plan pans out as it has been modelled, I think it will be very good for retailers – particularly if volumes rise from 40,000 to 80,000 in future – but I still worry whether carmakers have the discipline to stick with (agency) when the sector returns to a situation of free-flowing supply or considerably less consumer demand.”
AM reported back in August last year that Volvo Car UK had appointed a new commercial operations director and consumer director as part of a management restructure aligned to its ambitions to leverage agency model direct car sales.
Former consumer director Nicole Melillo Shaw stepped into the commercial operations director post previously occupied by Matt Galvin as Ben Roth took up the role of consumer director, stepping-up from his previous online business director position.
In last week’s letter Elvefors spelled-out further management changes designed to underpin the shift to agency, stating that the business had “significantly upweighted resource within the UK DTC project team”.
Among the changes were Marie Pateman’s move from People Experience to manage the organisation workstream, Neil Rilett’s move from the finance team to look after the finance and funding and Libby Watts transition from Care by Volvo to manage the offer, sales and operations workstreams.