Did Volvo Just Announce the Death of the Car Dealership as We Know It?
The automaker is going 100% electric, but that may not be the biggest news
No one likes getting the runaround at a car dealership, but people put up with it because they want those shiny new SUVs with that new car smell. And the only way to get those is to navigate the confusing, frustrating and sometimes diabolical rules of engagement set by dealers.
At least, that was the only way, until Tesla introduced the U.S. to a new car-buying experience that took place entirely online, no haggling involved. Yes, Elon Musk’s electric car company has physical locations (they call them Tesla Stores), but those are there for learning about the vehicles, test drives, service, things like that. The purchasing takes place on their website. They’re not the only ones doing it either; the idea has taken off in the used car space, with startups like Carvana and Vroom offering simplified online platforms to buy and sell vehicles.
So far, this hasn’t impacted traditional car dealerships in any big way, despite Tesla’s ongoing legal battles against that old-school model. But that could change following Volvo’s announcement this week that by 2030 its vehicles will only be available to purchase online. That again: In less than 10 years, you will no longer be able to buy a Volvo off the lot at a regular dealership.
Volvo is clear that this doesn’t mark the end of its brick-and-mortar dealerships. After Engadget published a story about the move, the automaker reached out to say that dealerships are still very much in the picture.
“Retailers will be critical to our future, being responsible for delivering, servicing and maintaining cars, plus facilitating test drives and face-to-face contact, and can also facilitate an online sale,” a Volvo spokesperson told the outlet.
That sounds very much like the Tesla model, especially considering that Volvo’s other big announcement is they’re planning on only offering fully electric vehicles by 2030. That means no gas cars and no hybrids. But as we’ve seen from other brands, EV plans are easily delayed by changing technology, supply chains and consumer demand. So while it remains to be seen whether Volvo, and other automakers, can reach their all-electric goals in their allotted timeframes (GM is aiming for 2035), moving sales online seems to be a much more feasible task, and one that could completely change the car-buying experience.
In a press release, Volvo said that the move to online sales “eliminates the need for negotiations” because of “transparent and set pricing models.” So while car dealerships aren’t necessarily on their way out altogether, the era of haggling over new cars just might be. Of course, shifting to this online-only platform is easier for a smaller, more premium brand like Volvo, versus, say, Ford or Chevrolet. But if car buyers vote for this way of shopping with their wallets, the bigger automakers will have to take note.
After all, the customer is always right.
Subscribe here for our free daily newsletter.
Suggested for you