But even as Gustafsson attempts to sell the plan to the U.S. retail network, he’s drawing fire from dealer groups that view the proposal as a Trojan horse that could fundamentally alter the franchised dealer model. If Volvo successfully pivots to digital-only retail, other brands could follow.
California New Car Dealers Association President Brian Maas said the group is putting Volvo “on notice.”
“It is the competition issue that is the crux of the problem,” Maas said. “We are not opposed to alternative sales channels as long as Volvo complies with applicable state laws.”
The California trade group, which represents about 20 Volvo dealers, noted in its letter to the automaker that the proposed retail model could violate the state’s franchise laws.
“Volvo dealer members have invested millions of dollars in facilities and personnel with a justifiable understanding that they would be partnering with Volvo as a dealer, not a mere delivery agent,” the letter said.
The Virginia dealer association said in its letter that media reports indicate Volvo’s intention to eliminate customer negotiations with dealers and price competition for new vehicles.
“Having depended upon those dealers to build their brand, Volvo has now decided their dealers are expendable,” the letter said. “Virginia franchise laws prevent such inequitable treatment of dealers.”
While Volvo will offer a factory-set price online, retailers are free to negotiate with customers, Gustafsson said. “Dealers can do what they want to do,” he said, “but we would like to be very, very competitive, and we want the family to stick together.”
