It’s no secret that Volvo dealers aren’t keen on the factory subscription plan. Last December, the California New Car Dealers Association even asked the manufacturer to end Care By Volvo on the grounds that it was taking business away from storefronts. The automaker responded by saying the service had proven popular with consumers, attracting new customers to the brand while reassuring dealers that version 2.0 of the subscription plan had been approved by the Volvo Retailer Advisory Board and would give shops more to do.
Rather than take the wait-and-see approach, the California New Car Dealers Association petitioned the state’s New Motor Vehicle Board. Last week, the group unanimously voted to direct the state’s DMV to investigate Care by Volvo and four claims that the service violates provisions of the California vehicle code — potentially leading to disciplinary actions.
Volvo is taking a very unique approach to its advertising for the Super Bowl this year. Rather than simply have the network air its commercials during the breaks, it has decided to compete with the game directly for viewership.
Called “The Longest Drive,” the automaker’s smartphone game is reminiscent of dealer and radio contests where people have to keep their hands on the car to win it. The difference here is that Volvo is concerned with your eyes. Participants will compete to log the most amount of time looking at stock footage of the Volvo S60 in the hopes of claiming one as a prize.
Mercedes-Benz tried something similar last year with its digitized “Last Fan Standing” competition. In that contest, people were asked to keep their finger on a Mercedes-AMG C43 Coupe as the company monitored their cell phone, waiting for them to make a mistake. Unfortunately, mistakes were made long before the contest began.
Polestar, the performance-oriented luxury brand created by Volvo’s Chinese parent company Geely, already has a 2-door hybrid sports car coming down the pipe later this year — the Polestar 1. However, the company is already teasing a follow-up sedan that aims to remove the internal-combustion component entirely and take on the likes of Tesla’s Model 3.
Dubbed the Polestar 2, the model will be a four-door fastback built on a modular platform with a battery pack intended to deliver roughly 300 miles of range on a single charge. While that sounds competitive, Volvo has previously indicated the Polestar 2 might start around $50,000. That’s not a far cry from the Model 3’s current starting MSRP of $44,000 ($46,000 until a few days ago), though Tesla promises a base version in the neighborhood of $35,000 later this year.
The California New Car Dealers Association is requesting that Volvo immediately end its Care by Volvo subscription service within the state. According to the group, the automaker is in violation of California’s franchise and consumer protection laws.
It’s been a long time coming, as Care by Volvo is clearly designed to minimize dealer interactions. Anders Gustafsson, CEO of Volvo Cars of North America, even said the program claimed as much as 15 percent of the XC40 crossovers intended for dealerships this year.
“It’s really the same concerns from everybody, and it’s just that they don’t feel secure,” Gustafsson of said dealers last month. “They’re afraid we’re going to take something away from them … I would say the biggest question mark around subscriptions is that consumers need to decide that. Our retailers are asking, ‘Please let us be involved, because we can help.'”
It looks like they’re tired of begging.
Volvo released a mysterious teaser image for the Los Angeles Auto Show on Monday. The photo features what is obviously a phone boasting bold text that reads “this is not a phone” while resting on the seat of an automobile.
While it’s not immediately evident what the car brand is promoting, the hashtags #FutureIsMobility and #AutoMobilityLA give us a few hints. Volvo has an app and intends on debuting it in Los Angeles at the end of the month. As for what it might be for, we have some hunches. The strongest of which results in a follow-up press image where the phone says it’s a car dealership or key.
Despite the push from an eager industry, car subscription services haven’t proven an overwhelming success. The general consensus is that premium services, while intriguing concepts, are too expensive and complicated to maintain at scale. Book by Cadillac, which was recently suspended by General Motors, is emblematic of the public’s lackadaisical response to a system mired in logistical issues.
However, the concept itself isn’t dead just because one manufacturer decided it wasn’t worthwhile. Other premium nameplates still have their own services — Toyota plans to launch its own subscription-based pilot program in Japan soon, while Volvo Cars has enjoyed some success with Care by Volvo. Still, framing it as a trouble-free victory for the brand would be a mistake. Volvo’s subscription service has been as much a learning opportunity as it has been an overwhelming triumph.
Cadillac recently made the choice to suspend its vehicle subscription service, claiming the operation hit some costly roadblocks. That’s been our beef with most subscription programs as well, only on the consumer side of the coin. Customers typically end up paying significantly more for access to a fleet of vehicles that, individually, would have been much cheaper to simply buy or lease. Still, the intended draw isn’t saving money, it’s convenience — most subscription services allow customers to swap between select models on the fly, baking in both insurance and maintenance fees.
While these subscription services have been limited to premium nameplates thus far, Toyota wants to try its hand and see how things play out for a mainstream manufacturer.
Automakers are trying everything under the sun to turn a larger profit these days. Building and selling cars is no longer enough. Manufacturers now offer data plans, rental services, lifestyle products, and much more. One of the newest additions to their collective portfolio is the subscription plan — which yields customers a vehicle, insurance, maintenance, and other perks for a monthly fee.
However, as the concept is preparing to enter the mainstream market, the value of such programs have been called into question. While subscription services look like one-stop shopping, often providing users with the ability to swap models throughout the year, their cost effectiveness comes into doubt when one examines the bottom line. We’ve been skeptical for a while but Edmunds recently crunched the numbers to find out for sure.
Having already launched the Care by Volvo subscription program, the Swedish-Chinese automotive brand wants to continue cramming feathers into its cap. It’s now launching a new mobility brand that sounds very similar to car-sharing services offered by numerous automakers and rental firms.
There could be an issue with the naming strategy, however. Volvo wants to call the company M, which is a letter of the alphabet that’s of particular interest for BMW. In case you’ve been in a coma for the last forty years, the German automaker has used the letter M (for Motorsport) to denote its performance division and affixes it to everything in its lineup with sporting pretensions. While it probably can’t claim ownership of all things relating to the mark, it’s definitely not going to be thrilled to see Volvo using it.
Automakers are throwing everything they currently have at the wall to see what sticks. The concept of “mobility” is now so broad that it encompasses automation, electrification, vehicle connectivity, alternative modes of transportation, driving aids, ride-sharing, ride-hailing, and even subscription services — and plenty of companies are giving them all a shot.
Last week, we talked about Volvo’s new car subscription service. Most of us had difficulties rationalizing the price based on how the product is being offered. A lot of companies are testing those waters right now, especially luxury brands. Lincoln recently launched a subscription initiative that is extremely similar to Cadillac’s, and Porsche has been buzzing about its own “Passport” service. However, mainstream brands like Ford and Hyundai are also trying their hand — albeit very differently.
Volvo Cars is rolling out a subscription service that allows access to vehicles for a monthly fee. It’s a growing trend among luxury brands. Book by Cadillac is the first service to spring to mind but brands like Porsche and Ford have introduced regional pilot programs offering roughly the same thing. Volvo’s subscription service is not a trial run, however. It’s the full enchilada.
For $600 a month, Care by Volvo is offering access to its new XC40 — the new compact SUV that just started production in Belgium this month. Here’s how it works: Volvo customers choose a car online and make a monthly payment that covers insurance, service, and maintenance. The subscription last 24 months but, during that time, customers will be given the opportunity to change cars and sign up for a new 24-month subscription as early as a year into the existing agreement.
It’s an interesting alternative to leasing and a lot of outlets have praised the service for being so affordable, especially compared to Cadillac’s monthly subscription fee of $1,500. But the services aren’t directly comparable. Fist of all, General Motors allows customers to swap vehicles month to month. Secondly, those models are valeted to you and could have an MSRP in excess of $86,000.