New car subscriptions will help Volvo Cars grow market share in the years ahead as it expands its Care By Volvo service to target business customers.
Care By Volvo, which allows consumers to drive a new car for a fixed monthly spend that includes servicing and wear and tear maintenance, is currently available in five markets in the US and Europe - including the UK - and is growing rapidly.
Volvo Cars chief financial officer Bjorn Annwall (pictured below) revealed customer contracts have risen to 10,089 in H1 2021, from 5,518 in H2 2020 and just 1,786 in H1 2020.
Volvo is getting ready to scale up Care By Volvo, and Annwall pointed out that currently the brand’s focus with the programme is only on private consumers, however in Europe the B2B market is the biggest segment opportunity.
“This is a way for Volvo to grow market share and as we scale this up now, by complementing the offering through growth in the B2B segment and adding more countries, this will quickly grow for the future.”
He said 80-90% of consumers who take Care By Volvo are coming out of other car brands.
“We’re taking them from the competition,” he added.
“In order to do this we need great digital systems, we need to build up our competence in direct sales and direct consumer relationships, and of course we need to do this together with our retail partners.
“We want consumers to get access to Volvo cars with very few clicks, and as much human interaction as they want.”
In Europe Volvo's H1 2021 overall sales are down -4%, he said, however the market is down -20% so the brand has gained market share.
Volvo chief executive Hakan Samuelson said globally the carmaker has had the best first half in its history, with new car sales reaching 381,000 units, and about a quarter of those were 'Recharge' plug-in hybrid or fully electric models.
By 2025 Volvo wants 50% of its entire sales to be fully electric battery electric vehicles (BEV).
Samuelson said Volvo's sales in the past 12 months reached 773,000 units which is "more or less" reaching the strategic goal it set back in 2011 to grow the business to 800,000 annual sales.
It's aim now is to reach 1.2m sales in 2025.
Volvo has already declared its aim for all new car sales to be transacted online, either remotely or at a showroom, by 2030.
By that point, it will only sell electric new cars, and its retail partners will receive agency fees for handling the vehicle and customer handover.