Volvo Offers Some U.S. Dealers Some Money to Close
Volvo is adopting the the Big 2.8's' overarching management strategy for '07: cut your way to prosperity. Automotive News [AN, sub] reports that Volvo's sliding sales have reached the point where the brand sells just 260 vehicles per dealer per year. FoMoCo's Swedish division is taking action, "asking its unprofitable and marginal dealers in the United States to give up their franchises." Asking? As in pretty please? The article takes its sweet time getting to the meat of the matter– how much Ford's going to pay these svag dealers to shutter their showrooms– and then serves-up a side dish. AN reveals that Volvo U.S. CEO Anne Belec has already allocated funds for the buyout program but "declined to say how much or how they would be used. Neither would she say how many stores are targeted for closing but made clear that it is more than a handful." I think they forgot to ask "Can you be any more vague?" In terms of actual news, Volvo's abandoning its sponsorship program (goodbye tennis) and leasing programs (in favor of low-interest loans), and focusing its marketing on larger and more heavily loaded cars (just in time for the compact C30's arrival). Volvo's retail advisory board chairman and store owner Ben Stein is not impressed. "The dealers are getting tired of a cut-cut-cut strategy," he said. "We need a game plan for sustained growth." Ya think?