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Volvo to cut dealer network

12/24/2007, 12:24 PM

By Drew Johnson

Volvo has announced that it will be trimming its dealer network. The Swedish automaker will be asking its unprofitable and marginal dealers in the United States to give up their franchises. The cuts are due to slow sales and the weakening U.S. dollar. Volvo currently has 355 stores in the U.S.

“We have dealers losing money this year, last year and the year before,” said Anne Belec, CEO of Volvo’s U.S. sales arm told Automotive News. “If they couldn’t make money two or three years ago, then they are going to really struggle going ahead. We want to talk with them.”

The automaker expects sales to slip by 10% to 15% in 2008. Volvo failed to give an exact number of how many dealers it expects to cut, but hopes to trim its franchises by about 20%.

Recent rumors have suggested that Ford is looking to sell Volvo, but the Detroit automaker says it is holding on to its Volvo brand — at least in the short-term.

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12/24, 12:35 PM

posted by:

F451

Unfortunate, but neccassry.

12/24, 12:36 PM

posted by:

F451

neccassry = necessary

12/24, 1:20 PM

posted by:

Veda

Necessary indeed however Volvo has the brightest future compared to other dying brands. Ford knows this and it’s trying to see how well it’ll fare in the future. With BMW seemingly trying to move lower in the price bracket to compete with Lexus, Volvo will also be in danger as well.

12/24, 1:57 PM

posted by:

Madcapp

Volvo is only interested in producing boring crap. 1 dealer per state should suffice.

12/24, 3:35 PM

posted by:

LP640

^you’re confusing that with Chrysler and GM you ****ing redneck

12/24, 3:51 PM

posted by:

Madcapp

LP640 if I want to hear anything from you, I’ll check in with you down at the salvation army. Otherwise shut your filthy piehole.

12/24, 5:09 PM

posted by:

Impulsive

‘Madcapp’, I agree … the C30 looks attractive until you get inside. I don’t think any other vehicle from any other manufacturer has me so bored on the inside. Sure, the console is ‘cool’ but bland, and the dash is one large expanse of nothing.

12/24, 5:41 PM

posted by:

sharpie

Well, if the dealer aren’t making any money, corporate is doing them a favor anyway. I think Volvo is unique. The award for boring interior still goes to Chrysler. Volvo’s interior is clean and unique with that waterfall center console. It is for the grown up, not rice boys.

12/24, 6:40 PM

posted by:

global_lightning

That ‘boring’ interior has excellent ergonomics and very intuitive controls (except for the radio. grrr…). The more time I spend in my S60 the more I appreciate how it’s well laid out.

Letting losing dealers out of their contracts will do both Volvo and the dealers a favor. I can’t see why any would try to hold on. This is something Ford should consider doing for its entire corporate line-up. The only downside maybe in area where you’ll suddenly have one (or no) Volvo dealers, suddenly they’ll be the ‘only game in town’ when it comes to factory service or maintenance.

12/24, 7:28 PM

posted by:

Impulsive

The interior is truly boring. Intuitive is not a selling feature … anything becomes second nature after a few uses. And that ‘waterfall’ console is pointless (storage should be in front, not behind), bland (no spice), although different.

As for Chrysler’s interiors … they aren’t as boring as Volvo’s, just really cheap looking.

12/24, 9:18 PM

posted by:

johnnycanuck

Even cheap vehicles have a half dozen airbags, anti-lock brakes, 5 star safety ratings etc, etc. Safety is no longer a privilege and it definitely doesn’t have to be boring. I’m not saying their safety record is passe, but Volvo needs a new angle.

12/25, 7:09 PM

posted by:

autonut

Funny to grasp the truth sometimes from execs. We never knew how well or poor Volvo performed, ’cause there were no stats available outside of FoMoCo. But Ford always insisted that Volvo is profitable and refused to sell it, like the rest of PAG. Now we know that it is may or may not been profitable and ford execs already expect bleak future for this brand: “If they couldn’t make money two or three years ago, then they are going to really struggle going ahead.” This is not bright prospect by any stretch of imagination. What a bunch of used car salesman.

12/25, 8:14 PM

posted by:

Veda

autonut: That’s true but a few years ago all they have to sell is the all new S40 which is years ahead of everything else they were selling. Now with the C30 and new S80, the dealers should be doing somewhat better. The corporate Volvo is probably still losing money.

12/25, 8:25 PM

posted by:

Commodore

As they should. I like Volvo, but they just have too many dealers. As does Chrysler. GM was smart to consolidate Pontiac-Buick-GM into one franchise. Same with Ford, who have been running Lincoln-Mercury for a while. I mean, who would go to a Mercury dealer unless SOMETHING else worthwhile was sold there? Volvo/Chrysler dealers should be converted to Saturn dealers in my opinions since Saturn is expanding.

12/26, 8:04 AM

posted by:

Get Real

Shouldn’t they just open “Volvo-Saab-Subaru” dealers ???

Save money and let university professors do one-stop shopping.

12/26, 3:17 PM

posted by:

Commodore

Get real, only if Ford sold Volvo, GM sold Saab, and Toy freed Subaru can that happen.

12/26, 3:17 PM

posted by:

Commodore

Although it never would anyway because those companies compete against each other. That would be like selling Chevrolet and Ford at the same dealership

12/26, 4:01 PM

posted by:

autonut

Veda, Ford sucked the life out of Volvo. It use to be enthusiasts car years ago. Then smartly it turned into “safest” car. Albeit all cars are safe now it was Volvo who pioneered crumbling zones, air bags (after Benz) and ABS.
Today their 10 years old 5 cylinder is in European Fords along with their 5 cyl diesel. We don’t see this stateside, but as a consumer in Europe I have to be nuts to spend extra coin for Volvo if their diesel or gasoline motor AND tranny sits in Ford/Mazda shell coupled with Volvo suspension bits. All new models of Ford cars in Europe are known to be of Volvo pedigree (in US we get 12 year old ****ty cars that even Chinese would not buy).

12/26, 9:10 PM

posted by:

Veda

autonut: that is true but I thought their turbo AWD models are worth checking out but only if you’re into AWD. Otherwise, an Audi 2.0T is a better choice in most cases. For some reason I still prefer the stock Volvo brakes better than any germans. It just felt a lot more solid in spirited driving. But that is also the achilles heel as they break down faster than any other brands. I’ve had 3 units that needed full brake pads replacements after only 1900 miles.

12/26, 10:42 PM

posted by:

TomF

Volvo owned the “safety” angle almost alone for years and years. Back when people mainly bought American gunboats that lasted three to five years and would only make it to 100,000 miles through divine intervention, Volvos were uniquely differentiated in the market. No longer. No carmaker has the corner on safety and Kias are built to coast past 100k. Meanwhile Volvos are not exactly quality stars any longer. Volvos are not the car the brand alludes to anymore.

12/26, 11:30 PM

posted by:

ashkan

“Volvos are not the cars the brand alludes to anymore.”
You hit the nail in the head.

01/07, 5:41 PM

posted by:

jackjimturkey

The two highest odometers I’ve ever seen were on Volvos. Too bad. I have a soft spot for Volvos.

Veda: “Volvo has the brightest future compared to other dying brands.â€
So it’ll take longer for Volvo to die?

Madcapp: “Volvo is only interested in producing boring crap.†Nah, I think it would be more accurate to say that Ford isn’t interested in spending the dough to get Volvo some interesting product.

Impulsive: I actually like the C30.

Get Real: “Shouldn’t they just open “Volvo-Saab-Subaru” dealers? Save money and let university professors do one-stop shopping.â€
Good ****!

 
 
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