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Volvo retains its dealer profitability

Volvo Cars UK says dealer profitability has held up in its franchised network at the same level as the end of last year.

Retailers are achieving a 2% return on sales on average.

However, the 108-strong network’s top performers are making 5%, network and business development director Kevin Meeks told AM.

Meeks said the network is strong partly because dealers had “put their house in order” since the start of the recession and partly because they’re selling more higher specification cars while not having to hold large stocks.

Volvo has also been getting dealers focused on “customer journey man-agement” rather than simply seeing the next sale.

It involves identifying what is relevant to a particular customer’s needs, such as the most suitable model, service plans, finance and insurance products and accessories.

It also includes making the customer aware of Volvo’s broader offerings.

Meeks describes it as “about the psychology of selling” and gives an example that a customer interested
in a new S60 ought to walk past a C30 hatch, XC60 crossover or S80 saloon on the way through the showroom to the S60, so that they see “some of the surprising things that Volvo has on offer”.

“A lot of S60 customers won’t know that we build S80 because it has such a low profile, but we might have some prospects who decide S60 isn’t big enough for their needs,” he added.

Strong sellers this year have included XC90, XC60, plus DRIVe and R-Design derivatives across Volvo’s range.

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