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Discussion Starter · #1 · (Edited)
GOTHENBURG, Sweden—Volvo Car Corp. wants deluxe dealerships.

Having spent the past five years developing new, more upscale cars in a bid to compete with German luxury auto makers, the Swedish brand is now focusing on improving the quality of its showroom network.

The makeover effort is centering on the U.S., where Volvo says the level of servicing provided by its 295 dealers is substandard.

“I’m giving a thunder speech to retailers: ‘Guys, it doesn’t work like this anymore’,” Lex Kerssemakers, head of Volvo’s North American operations, said in a recent interview at the company’s Swedish headquarters in Gothenburg. “Now we got good cars, we need to work on how we receive customers.”

Volvo, owned by China’s Geely Holding Group Co., is betting it can become a luxury brand and bridge the gap with the likes of BMW, Audi and Mercedes with new models such as the XC90 SUV, launched last year, and the S90 sedan, due for sale in the spring. But Volvo executives are concerned that the affluent customers the company is trying to lure might be put off by shabby showrooms and poor servicing.

“If you mismanage them once they don’t come back,” Mr. Kerssemakers said.

In Europe, Volvo has succeeded in maintaining sufficient sale volumes to keep its retail network afloat and in China, the company has been expanding at a steady pace in recent years.

In the U.S., however, Volvo sales fell to about 56,000 last year, leaving many dealers in the company’s relatively large network unable to make money. Customers took notice, according to a recent study by market researcher JD Power, in which Volvo scored below average on overall service satisfaction, facilities and quality.

Mr. Kerssemakers said that Volvo’s turnaround on the U.S. market—where November sales nearly doubled to about 7,000 vehicles from the year-earlier level—should convince dealers that time has come refurbish their showrooms and repair shops.

“Now, with the XC90, they make money,” he said.

Paul Korzinski, owner of a family dealership that has been selling Volvos in New Jersey since the 1950s, said that he would like to see more proof that the tide has actually tuned before making any large new investments in his business.

“I think everybody is a bit gun-shy,” he said in a telephone interview.

While the new XC90 has indeed brought a lot of new, wealthier customers to his store after a couple of “very tough” years, Mr. Korzinski said that he would probably wait to see how the S90 sedan performs before making any bold move.

Mr. Kerssemakers said that he was putting incentive programs in place to motivate retailers to renovate their facilities and make them more presentable. The company is also looking to introduce personal-service technicians to match services provided by luxury brands.

“There are still brands that are doing a better job,” Mr. Kerssemakers said. “In two years, I want us to be better than them.”

http://www.wsj.com/articles/volvo-looks-for-u-s-sales-boost-with-showroom-makeovers-1450795622
 

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I sure hope part of this includes a plan to implement standard practices for better communication.

I don't know if the communication problem stems from corporate headquarters or dealership management, but it must improve significantly because a lavish showroom wont keep people coming back, which is what they really need to target, loyalty.
 

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Actually, if it hadn't been for one of Mr. Kerssemakers' dealers I wouldn't be in the position I'm in today, namely completely out of Volvo and totally happy with my VW TDI's. About a year ago I had taken my '01 S60 into Galpin Volvo in Van Nuys to see if they could hook it up to VADIS and see what was causing the alarm to self-trigger at odd hours of the day and night. I had replaced the alarm module, but that didn't do anything and the alarm still activated on its own when it wanted to. I even disconnected the motion sensor, but got the same result. So I took the car into the service bay at Galpin. The SA noted the car was over 10 years old, and because it was 'aged' and had the failing, crumbling plastics in the engine bay, the estimate to even look at the car jumped 50% from ~ 200 to over $300 because (I'm summarizing here) the potential damage to the plastic parts during the diagnosis could cause additional damage to other systems (What Mike Busch of "Savvy Aviator" fame calls "Maintenance-Induced Failures," or MIFs, in the aviation world.) I only had a standard OBDII reader, and I didn't have the VADIS readers or Chinese knockoffs that relied on Windows XP/Service pack 3 as XP had stopped being supported by Microsoft at that point.

I drove away. Then last February I'd been frustrated with having to get under the car again to replace the front strut mounts that had miraculously survived to 60,000 miles with the IPD HD mounts instead of the OEM's 40,000 miles, but still. I was under the car again. Gaah. And the rear was sagging and creating wear on the rear inner tread that wound up imbalancing the rear wheels. So I made a mistake and got on to Costco's Auto program to see if my local dealer had any Golf TDI's. I'd done this before; Carlos had replied from the Glendale VW store, we chatted, then I'd leave it after I talked myself into keeping the Volvo another few years. My original thought was to keep it until the Tesla Model 3 came out and I could get the BEV with a 250 mile range. Much to my chagrin another dealer across town picked up the Costo app and I inadvertently got the two VW dealers into a bidding war on the TDI and got it for $400 under the Cosco price (invoice).

Sold the S60.

I'm totally happy with the TDI; I'm getting about 45 mpg mixed in the same cycle that the S60 would get 24 to 25. 50 on the highway at 65 mph. Here in So Cal diesel was cheaper and is now the same price as regular. My wife's '09 Jetta TDI doesn't do quite as good, gets only 38 to 43 combined/highway. In 7 years of ownership on the Jetta we've only had one major repair, unlike the Volvo P2's that were, as mentioned before, regularly disassembled for repair, especially on all the recycled rubber suspension components typical of the P2 models. The '15 Golf has needed no warranty repair int he last 10 months whatsoever. And come to find out, Ross-Tech http://www.ross-tech.com/index.html has a code reader that gets into all the modules in our VW's for $250 to $350. Sold.

We just picked up the $1000 vouchers and $1000 VW store credits for the dieselgate issue, and my wife has clearly stated she does not want another Volvo, ever, and does not want to give up her Jetta TDI. We'll have to wait and see if the '09 can even be retrofitted to meet NOx standards here in California, but we'll cross that bridge when we get to it.

In short, no regrets for changing to VW, despite dieselgate.

Thanks Mr. Kerssemakers, Galpin Volvo did us a favor and got us into the 2015 TDI before it was too late.
 

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Every Volvo dealership I've set my foot in (6 of them) looked like crap.
Cramped, small, outdated... that's not the image the luxury brand should project.
Couple of them went through renovations since then, but now the only difference is that the exterior looks spiffy. The interior is still cramped and can induce claustrophobia within seconds.

I love Volvo, I'll keep buying them, but then again, I never needed to be convinced that this was the car for me. But attracting new customers with the way those dealerships look, it's just going to be very very very hard.
 

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we are not far behind you jplman. we are having problems with all our '03 v40, '06 v70 and, '12 s60. the 60 is under warranty still so that stays a while, but i have had no offers on the v40. no one seems to want them up here near s.fran.

best of luck with your cars we are looking at the tdi too.
 

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I don't know if the communication problem stems from corporate headquarters or dealership management, but it must improve significantly because a lavish showroom wont keep people coming back, which is what they really need to target, loyalty.
My experience this year, with getting another Volvo has been horrible. Talk about loyalty... with 4 months left on my lease, 5 out of 6 dealerships I talked to didn't even want to entertain the idea of me getting a car from them. All of them said - come back when your lease is up and then we'll talk. Yet only one dealers said: well, you're ordering a car, it'll take 3+ months, you should've come to me sooner!

My experience with Volvo dealerships is that they are not motivated to retain their customers. Almost all of them just don't care...
 

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we are not far behind you jplman. we are having problems with all our '03 v40, '06 v70 and, '12 s60. the 60 is under warranty still so that stays a while, but i have had no offers on the v40. no one seems to want them up here near s.fran.

best of luck with your cars we are looking at the tdi too.
Hastee, long time no see, man. Hope everything is going well. Yeah, I sold the 14 year old S60 (124k miles) for a mere $2400 because there were no other offers. Heck, even my '92 F150 that I bought new (OK, it only has 39,000 miles on it) is worth almost twice as much. But I was happy not to have to work on it again.

My experience this year, with getting another Volvo has been horrible. Talk about loyalty... with 4 months left on my lease, 5 out of 6 dealerships I talked to didn't even want to entertain the idea of me getting a car from them. All of them said - come back when your lease is up and then we'll talk. Yet only one dealers said: well, you're ordering a car, it'll take 3+ months, you should've come to me sooner!

My experience with Volvo dealerships is that they are not motivated to retain their customers. Almost all of them just don't care...
I'm surprised that there was not as much focus on customer retention, as those are (should be) the easiest to convert back to new sales. But (and I'm only a casual observer, here) Volvo is in the process of changing their demographic from the old to what is and will be the new demographic, namely, the luxury-oriented. I think this has to do with Mr. Shufu and the "new money" mentality that came with him, as differentiated from the "old money" outlook of yesteryear when the tagline from one Volvo ad from the mid '70's summed it up: "Volvo, the luxury car for people who think."

Again, I'm guessing here, but subliminally Volvo wants to change demographic from 'safety' to 'sex,' and that's going to be a very tall order, as it may require dropping an entire demographic that concentrates on 'safety' (or, more likely, the prevention of death) to 'sexy,' which is the forte of Mercedes/BMW/Audi. Get the popcorn. Maybe they'll pull it off, you never know. But it does mean that the old demographic may be left by the wayside.

Sorry for your experiences. I hope something comes along that you can be happy with. Best of luck.
 

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In my area they don't need to make the showrooms super fancy, but they should never be shabby, and always clean and well kept.

An important issue will be how the staff tends to the customer and how they make them feel. Higher end buyers want to know their business is genuinely appreciated and that their issues, if any, will be handled consistently and fairly. Some will really want to be catered to and communication must be top notch.

Teach employees to look at the longer view rather than grab for some short term gain (like the guy at a local dealership who lost any future business I might have given them over a 50 buck charge that should have never been and he knew it).

"But it does mean that the old demographic may be left by the wayside."

Yes, this is most likely happening, but there will be another generation or 2 that might fit the old demographic. I hope Volvo succeeds in this transition never forgetting they have something special and that is swedish SOUL, something mercedes will never have.
 

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Sorry for your experiences. I hope something comes along that you can be happy with. Best of luck.
I'm happy with my current Volvo and will be very happy (I'm sure) with a new one (once it arrives at the dealer in a couple of weeks).
It's just I didn't enjoy trying to practically pry the cars out of the hands of the dealer(s).

I came in with a firm statement of what I wanted (a custom order S60) and got no response but from 1 dealer.

I'm very happy with my current dealership though.

P.S. Also, I think my wife and I are the demographic that Volvo is targeting now (early 30s), but thing is, they forgot to tell their dealerships that...
My first Volvo experience (3 years ago, 29 at the time) was hilarious. I came in with the intent of purchasing (not even leasing) an S60, and the sales consultant told me that I was too young for the car and should go down the road to look for something more age appropriate(Audi and Lexus)...
 

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I'm happy with my current Volvo and will be very happy (I'm sure) with a new one (once it arrives at the dealer in a couple of weeks).
It's just I didn't enjoy trying to practically pry the cars out of the hands of the dealer(s).

I came in with a firm statement of what I wanted (a custom order S60) and got no response but from 1 dealer.

I'm very happy with my current dealership though.
Good deal! I'm glad it all worked out for you. Enjoy.
 

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That comment from the dealer highlights the biggest issue with a dealer model. There should be no discussion between a dealer and the Mfg about revamping the dealers. It should be mandatory to maintain the franchise. If the dealers were owned by the Mfg, they would all look the same and would all communicate the same and would all have one Volvo experience. All of the dealers in the Bay Area look new as they should, they just don't all have knowledgeable staff. When you have dealers being run as independent companies, they run on their own priorities, not Volvo's. This also shows you that while people at Volvo itself are confident in Volvo's future, the dealers don't necessarily share that enthusiasm.
 

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Discussion Starter · #12 ·
That comment from the dealer highlights the biggest issue with a dealer model. There should be no discussion between a dealer and the Mfg about revamping the dealers. It should be mandatory to maintain the franchise. If the dealers were owned by the Mfg, they would all look the same and would all communicate the same and would all have one Volvo experience. All of the dealers in the Bay Area look new as they should, they just don't all have knowledgeable staff. When you have dealers being run as independent companies, they run on their own priorities, not Volvo's. This also shows you that while people at Volvo itself are confident in Volvo's future, the dealers don't necessarily share that enthusiasm.
+1. They really need to have one big conference about enthusiasm and sales . As of today they only seem to have sales +- enthusiasm from the dealers side.
 

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" where Volvo says the level of servicing provided by its 295 dealers is substandard."
Ayup to that. How come I know more about the car than the service writer?
 

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I can understand how the dealerships have little faith in Volvo especially during the Dark Ages.

But I can see the beginning of the Volvo Renaissance. So now is the time for the Volvo dealerships to embrace the new beginning by updating their showrooms.

To be quite honest, I compare the Volvo dealerships to Lexus dealerships like a Travel Lodge Motel to a Ritz Carlton Hotel. Lex K. is right. The Volvo dealers have to ramp up their appearance. I mean really, there are better looking Toyota dealerships around.
 

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I mean really, there are better looking Toyota dealerships around.
My second car is a Hyundai.
That dealership is a palace compared to the Volvo I usually go to for service. To the point that there are only 4 seats in the "waiting room" (which is just 4 chairs by the door) at the Volvo dealer.

The other Volvo dealer, that updated the dealership recently is on par with what I'd call a luxury dealership appearance. It's still small, but it looks nicer now.
 

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Once again, the article states what so many on this forum are in denial about: Volvo was *not* a luxury brand in the past, but recently reinvented itself in effort to *become* a luxury brand to challenge the big 3 German luxury giants. With Volvo themselves being rather direct about their intentions, one would hope their fans would stop insisting that Volvo has always been a luxury brand and not a utilitarian brand whose utilitarian fanbase has largely gone to Subaru.
 

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Once again, the article states what so many on this forum are in denial about: Volvo was *not* a luxury brand in the past, but recently reinvented itself in effort to *become* a luxury brand to challenge the big 3 German luxury giants. With Volvo themselves being rather direct about their intentions, one would hope their fans would stop insisting that Volvo has always been a luxury brand and not a utilitarian brand whose utilitarian fanbase has largely gone to Subaru.
As I intimated in my post above, Volvo is in transition to "luxury" and may have to drop its old demographic to attain that image. I acknowledge I'm the old demographic (luxury car for people who think) and, quite frankly, the pure "luxury" demographic and the tactics needed to sell to that demographic makes my skin crawl. But Mr. Shufu bought the company and wants to take it to "luxury," so that's where it's going to go whether your or I like it or not. So maybe the remodeled dealerships will work.

Maybe not.

Time will tell.

At one point we do have to be like Elsa and just "Let It Go." It's gonna do what it's gonna do no matter what we do.
 

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^ I completely agree. :thumbup:

I definitely think they can navigate the transition, but I think they'll need to throw a lot more money at the customer experience up and down the line to make it work. The XC60 is a solid vehicle and is keeping the brand afloat in the US right now. The XC90 is selling well, but is buggy. Then again, so is pretty much every Audi and BMW from the last decade, and that hasn't hurt sales any.

The biggest differences I see between Volvo and its German role models are that Volvo has pretty much no advertising presence. I know what a Volvo looks like because I'm a fan, but to the average luxury connoisseur, Volvo isn't even on the map. They'd do well to tap into their holding company's budget and throw a lot more cash at billboards and TV spots if they want to drive people into the dealerships, because no matter how good the cars are, no one's going to buy 'em if no one's heard of 'em.
 

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The biggest differences I see between Volvo and its German role models are that Volvo has pretty much no advertising presence.
I've seen an XC90 commercial on average of 2 times during every commercial break on almost every channel.

Problem is - it's a horrendous commercial...
 

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no one's going to buy 'em if no one's heard of 'em.
True, but the traditional advertising methods may only be a waste of money nowadays. If Volvo wants to get attention, it will have to do something equivalent to what Mercedes did in the 1950's when they brought over thousands of diesel sedans and no one bought them (for several reasons: 1) they were made in Germany and everyone had just been through a major war with Germany and were a little ticked off at buying something from their former enemy, and 2) the cars were noisy, underpowered, and smelly. They didn't sell.) Left with thousands of cars that were going nowhere, someone had the brilliant idea to give the cars away at bargain basement prices to doctors and dentists. Because that demographic was considered 'rich' by their patients, the patients saw the cars every time they went into the medical office. The patients associated the cars with the 'rich' doctors, so they bought the cars themselves. This perception of Mercedes has lasted here in the US to this day.

I remember the time I was on a Volvo focus group panel and we had one tiny lady who was asked along with us about the cars (we were looking at what was to become S80 MkII) Our petite lady focused on the Mercedes. Nothing else. She wanted the emblem on the hood, cared nothing about anything else, said so in her responses. She was 'rich' and projected it by association with buying the Mercedes.

Advertising won't cut it. Volvo has to figure out how to emulate what Mercedes did and make the buyers associate 'wealth' with the car.

And don't ask me how, I have no clue. But if Volvo did that, it would give me another reason not to buy Volvo (as if I need another) because my wife does not want a 'target' car like the Mercedes/BMW with the flashy emblem on the hood that screams 'rob me!'
 
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