Fleet News

Face-to-face: Volvo

TAKE a closer look at Volvo as a company and you will find it is full of surprises that buyers might not expect.

For example, its biggest-selling single model in the UK last year was an off-roader, the XC90, and around the globe, more than one-third of its products are sold with all-wheel drive.

And if you haven’t taken a look at its model range in recent years, that will bring a few more surprises, as a focus on design has completely changed its image, without sacrificing its commitment to safety.

For executives at Volvo, perception of the brand has already changed significantly but, even so, its role as a global brand has also developed massively in the past few years.

Last year, the company enjoyed record sales globally, up 10% to 456,224 cars, with nearly one in three sales in the USA.

Sweden accounts for just 20% of its sales now, taking 51,464 cars, about 10,000 more than the UK. One-third of all Volvos sold had all-wheel drive, perhaps reflected in the fact that the XC90 was the best-selling model globally and in the UK.

In the UK, diesel accounts for about 60% of Volvo sales and this is likely to increase with the introduction of new diesel engines recently, including a 1.6-litre diesel in the S40 and V50.

And there is more to come to change the shape of Volvo this year, particularly in the fleet market.

It is predicting a sales growth of about 3,000 units to 43,000 this year, boosted by the growth of the S40/V50 range with new engines.

Fleets will pay a huge part in this, accounting for 45.5% of sales, the majority taken by XC90, V70 and XC70, S40 and V50.

Demand will come from a number of channels, including through end-user accounts that grow with the brand and particularly with specific customers who are already taking other Ford-owned products that haven’t been introduced to the brand.

Behind the growth in demand will be Ian Rendle, corporate sales manager, and John Wallace, leasing and rental manager.

Already, the team has launched a ground-breaking free fleet customer servicing package for S40 and V50 for three years/60,000 miles, available during 2005. But there is more, including affinity and employee schemes.

Rendle said: ‘We class affinity schemes as a group of individuals or companies that have a common interest through business, leisure, religion, sport etc that can be communicated with and marketed to as a group.

‘Employee schemes are for employees and direct relations of employees working for a large company who are not entitled to a company car. This might include people on the pension scheme.’

Last June, Volvo launched a corporate sales programme aimed at driving sales through the dealer network.

It is aimed at developing a corporate communications programme to create a database providing dealer leads and sales and help them serve the local fleet market as effectively as possible and company car drivers better.

In addition, the company is working with leasing companies to ensure monthly rates are competitive, part of the reason behind the free servicing offer, which is intended to reduce leasing costs without additional front-end discounts that could affect residual values.

Wallace said: ‘We also have the Volvo partnership programme, offering free metallic paint, longer-term demonstrators and short-term lease cars and we work in partnership with the industry to ensure residual values are as realistic as possible.’

According to Volvo’s figures, the effort seems to be paying off, with monthly rentals for its key models such as the S60 significantly lower than rivals.

Volvo 2004 fleetsales

Model Fleet Total Mix
S40 3,115 6,786 45.9%
V40 2,120 3,992 53.1%
V50 1,495 3,526 42.4%
S60 3,860 6,000 64.3%
S80 1,442 2,268 63.6%
V70/XC70 4,570 8,717 52.4%
XC90 1,405 7,178 19.6%
C70 616 1,538 40.1%
Total 18,623 40,005 46.6%

  • Source: Volvo
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