Volvo's CEO Rattles Dealer Network With Statements on Direct Sales
Volvo CEO Jim Rowan wants to sell cars directly to consumers, but his statements and moves in other countries have the automaker’s American dealer network up in arms. Speaking on an earnings call, he expressed frustration with Volvo’s distance from its buyers and said the company plans to learn as much as possible from the new sales model in the U.K. before rolling it out to other countries.
Rowan said, “it seems strange for me coming from the consumer electronics and technology industry that you can sell a product which is $40, $50, $60,000 of value to a customer that you never speak to pre-sales and you never speak to post-sales.” Rowan, CEO of Dyson before reaching Volvo, believes that as vehicles become more connected, the automaker must be part of the conversation with buyers.
Unsurprisingly, dealers aren’t happy with this news. Volvo Retail Advisory Board chair Ernie Norcross said Rowan’s mentality sets the automaker on a head-on collision course with its dealer network. “We do not feel respected or valued as partners with his comments,” Norcross told Automotive News.
Though Rowan and many buyers want a direct sales model, U.S. law and automaker-dealer agreements may make it largely impossible. Rowan said it’s not important how consumers buy Volvos, whether at home on a computer or on a dealer’s lot, but he wants the automaker to be involved at every touchpoint along the way. However, he did emphasize the customer buying from Volvo instead of a dealer, even if they’re picking up from the physical location.
[Image: Volvo]
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Chris grew up in, under, and around cars, but took the long way around to becoming an automotive writer. After a career in technology consulting and a trip through business school, Chris began writing about the automotive industry as a way to reconnect with his passion and get behind the wheel of a new car every week. He focuses on taking complex industry stories and making them digestible by any reader. Just don’t expect him to stay away from high-mileage Porsches.
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At one time I had 5 New model Volvos in my garage and driveway. I was a true advocate for the company. Then you sold out to the Chinese. Prices sky rocketed but value for money did not. I will NEVER buy another Volvo. And trust me when I say, I am the consumer you should be selling too
I have owned three Volvos and planned to always buy Volvos. No more, I cannot afford nor do I want to pay over $50000 for a car. I would have bought the cross country V60 but not at an inflated price. I will miss Volvo but I'll adjust. BTW, I would NEVER do a subscription to a car, that's a ridiculous idea.