The younger generation are now used to subscription services, with online streaming. Is there a generational change in terms of people no longer wanting to buy things?
“It’s clear the younger generation don’t need to own things and they’ve been raised with that approach, driven by the technology we have now.
“But you can’t say the subscription model will work for all. But at the stage we are now in the automotive industry and Volvo specifically, we’re going all in to make the move online – and this is a first step. Eventually, we’ll need to come up with other ways to access a car that works well for online and Care by Volvo can guide that.”
Volvo boss Håkan Samuelsson said the target was for subscriptions to account for 20% of cars sold by 2022. Is that still realistic?
“I don’t want to speculate. The first milestone we’ve set is to reach 10% of new cars and that’s a realistic goal within a reasonable time frame. We have high ambitions going forward.”
How is the growth of online changing the approach of a car firm such as Volvo?
“We’re coming from a tradition of wholesaling cars. Now it’s just as important what happens when you’re in a subscription, so it’s about how we’re working with customers on things like car maintenance, and the convenience of that. All of those processes are a change for us.”
Is it hard to find a balance between online and traditional car sales?
“It’s not Volvo driving the change. It’s the online world and technology. Whatever we do is going to happen anyway, so we’re trying to be at the forefront of it.
“For us competing in the online world, our omni-channel offer is key, so it’s about ensuring there are local partners customers can go to if they have a problem. The sales process may change, but retaining customers is truly important.”
You’ve come into Volvo from outside the car industry, with a background in online. Have you found the industry prepared to adapt?
“Some Volvo retailers have been moving into online on their own, but if they all did that, it would be fragmented. That’s where we come into the picture, to make sure it’s done in a joined-up way, protecting the business model and the whole Volvo brand.
“When you look at retail ecommerce, two players – Amazon and Alibaba – have 40% of all online trade. I’m not saying that would be the case [in the car industry] but you might see a reasonable development in that direction if we don’t make sure we meet customer expectations.
“The willingness to do that in Volvo is very high and we need to make sure everybody knows this is something we’re trying to do together – and not just something that benefits Volvo.”