Volvo News: Volvo's NA CEO Talks About Care By Volvo Hiccups, What's Next

[William Maley]

Care By Volvo was one of the first new car subscription services to launch. It offered a buyer an XC40 with a yearly allowance of 15,000 miles; maintenance, insurance, and a concierge service for either $600 or $700 per month for 24 months. But the service had some hiccups with various issues dealing with paperwork and not hearing back from dealers. 

"The process was very, very stretched. We have learned that the process needs to be smoother, and also the process related to insurance and all the rules in all the states in this beautiful country ... we have learned a lot," said Volvo's North American CEO, Anders Gustafsson to Roadshow.

A key example is having a larger stockpile of vehicles allocated for subscribers. The entire Care by Volvo allotment of XC40s sold out in four months, causing Volvo to push deliveries of new XC40s through the service till next year. Gustafsson admits Care By Volvo is "far away from where we would like to be." But he believes the S60, the next vehicle to be offered through the service will be much smoother.

Roadshow also asked Gustafsson what's next for Care By Volvo. He revealed that it could be used cars.

A used-car subscription service "is probably 50 percent of the questions that we receive from our customers and from our retailers," said Gustafsson.

As for when something like this could appear, Gustafsson said it could happen within a year.

Source: Roadshow

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[G. David Felt]

Still not sold on this kind of service, but I guess for someone that wants a new auto every year or two it works. For used auto's this makes no sense to me. Auto's depreciate so fast and as things get broken you have a mess for used auto's. No one seems to take care of their auto's like me so I would not be interested in a used auto subscription service. FAILED CONCEPT IMHO.

[smk4565]

You can lease a Volvo XC40 T5 Momentum for $415 a month.  Insurance is about $80 a month.  So does Volvo believe that maintenance on a new car under warranty is $205 per month?

Only way this service makes sense is it was unlimited milage and a person who travels for work or drive Uber full time and puts 40,000 miles a year on the car could abuse the heck out of the thing and hand it back after a year.

[daves87rs]

You’re paying for the “perks”....

 

A fool and his money parts easy here.....

[Drew Dowdell]

These Subscription services are still too expensive.  I imagine they're trying to turn a profit on reselling insurance and that is one thing that is driving up costs.   

The only good thing I see about this is the ability to "unsubscribe" almost any time you want after the first year... but I would be swapping out the car as many times as I was allowed just beacuse I'm allowed. 

These Subscription services are still too expensive.  I imagine they're trying to turn a profit on reselling insurance and that is one thing that is driving up costs.   

The only good thing I see about this is the ability to "unsubscribe" almost any time you want after the first year... but I would be swapping out the car as many times as I was allowed just beacuse I'm allowed. 

What I don't get is why the manufacturers want to get into the insurance business. Getting out of their core comfort zones usually leads to poor results.