Luxury car manufacturer Volvo has announced its shift to a direct-to-customer (D2C) retail business model, following in the footsteps of Mercedes Benz.
Swedish luxury car manufacturer Volvo is planning to move entirely to direct sales to customers for all its retail sales in India. This follows the footsteps of Mercedes Benz India, which adopted the Direct-to-Customer (D2C) retail business model in October 2021. With this move, Volvo will own its entire stock of cars and sell them through appointed franchise partners. This will allow Volvo to invoice the new cars directly to customers while also taking care of bookings and orders. Industry experts say that such a model may not be practical for mass-market cars, but it could work for premium car makers like Volvo.
Volvo aims to gradually transition all its car models to this approach, allowing the company to take full control of stock and handle sales through appointed franchise partners. By directly invoicing customers and managing bookings and orders, Volvo aims to enhance its customer experience. This move may inspire other premium automakers such as BMW, Audi, and JLR to consider a similar strategy in the future.
Talking about the development, Managing Director of Volvo Cars India, Jyoti Malhotra told ETAuto, “We opted for a direct sales model for the XC40 and the response has been good. Now we will opt for C40 Recharge as well. The plan is to gradually move all the models to this direction.” With this move, Volvo will own its entire stock of the respective car models and sell them via appointed franchise partners. This will allow Volvo to invoice the new cars directly to the customers while also taking care of bookings and orders. Earlier, Mercedes Benz India started selling its cars directly to the customers via Retail of the Future (ROTF) business model in October 2021. Before India, Mercedes had launched the ROTF model in South Africa, Sweden, and Austria. Industry experts say that such a model may not be practical for mass-market cars given their large sales volumes. However, it may work for premium carmakers and the likes of BMW, Audi, and JLR may follow this trend gradually, ETAuto reported. Around the globe, Elon Musk-owned Tesla sells its cars directly to its customers via an online platform. While it has showrooms for customers to experience Tesla vehicles, take test drives etc, the sale and transactions are done directly by Tesla.