The company has had to abandon its goal of achieving 50% of sales through online channels by 2025.
Four years ago, Volvo set an ambitious goal for 2025: to sell at least half of its cars online. However, the Swedish company has now acknowledged that this sales model hasn’t been successful.
In short, the company hasn't sold a single car through online. It’s been a big reality check. Volvo had considered adopting this approach with the launch of its second electric car, the Volvo C40 Recharge.
This proves the Tesla approach, an online-only sales model, isn’t for everyone.
As a result, the company has now admitted to abandoning its goal, acknowledging that 0% of its customers complete the online car purchase process. Bjorn Annwall, Volvo’s chief commercial officer, told Autonews Europe that one reason for this is the differences in purchasing behaviors between individual customers and companies.
Volvo finds it easier to sell online when dealing with companies that buy entire fleets of the same vehicle. However, when it comes to selling cars to individual customers, the process isn’t as straightforward.
In this regard, Steve Young, managing director of the automotive retail consultancy ICDP, said the following at the Automotive News Europe Congress in Frankfurt on June 12:
“It [announcing online sales percentage targets] was used as a way of setting an ambition, but it was absolutely naive to think it would change… The targets were too ambitious and not precise.”
Annwall, the company's chief commercial officer, specified that “zero percent” of buyers complete the entire car purchase process online, adding that “it’s very hard to stream a car to the customer” in this medium.
In contrast, Tesla successfully transitioned to selling exclusively online after closing its physical stores in 2019, a move that few manufacturers have been able to replicate. Meanwhile, companies like Amazon are entering the car distribution market through partnerships with major manufacturers such as Hyundai.
Selling cars online can be both a fantastic and a terrible idea, depending on whether a traditional brand’s business model relies on the traditional dealership experience.
This article was written by Ricardo Aguilar and originally published in Spanish on Xataka.
Image | Volvo
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