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Volvo launches sponsored dealer programme in call to entrepreneurial dealer principals

Volvo VRE 'street'

Volvo Car UK has launched a sponsored dealer programme aimed at rebalancing the variety of partners in its franchised network.

The brand is looking to find a handful of ambitious dealer principals, who are typically already running dealerships within a group, and support them in taking over a Volvo dealership.

Phil Hand, VCUK's network development director, said its “balance of representation has been skewed” by the trend for dealer group acquisitions and ongoing owner consolidation.

Volvo recognised that the owner-businesses score top in its performance league, he said, so it is seeking to put the bottom performers in the network – which he declined to identify – under new ownership.

The end of the Motor Vehicle Block Exemption Regulation in 2013 gave carmakers more control over who represents their franchises.

The first appointment to the programme has already been made – Volvo supported existing franchisee Paul Rigby Volvo, which has an outlet in Birmingham, in taking over the Stourbridge dealership from Brindley Group.

Under the sponsored dealer programme, successful applicants will receive business funding support through Santander. 

This includes start-up cashflow support and wholesale stocking lines, backed by Volvo with no risk to the dealer principal, plus term funding at commercial rates.

Property support is also available, as Volvo will consider taking head leases secured against its covenant, with the dealer signing a sublease from the carmaker. 

And if the business has been underperforming Volvo would provide direct cash support in the early years.

Currently VCUK has 55 owners across 102 sales sites. Network partners comprise seven plcs, 16 large multi-franchise regional groups, one large regional group solus to Volvo, 23 owner-driver small multi-franchise groups, and eight solus Volvo owner-driver companies.

 

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