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Product and profitability will be top of mind for Volvo retailers at the NADA Show.
Volvo Retail Advisory Board Chairman Kevin Flanagan said retailer profitability dipped to 2 percent in 2024 from 3.1 percent the prior year. Gross profit per vehicle fell by more than 2 percent last year.
Meanwhile, Volvo’s product portfolio is aging — the XC90 and XC60 crossovers have not been redesigned in nearly a decade — making it harder to move vehicles off dealership lots.
Dealers are concerned because “volume is off and profits are off,” Flanagan, president of Smythe Volvo in Summit, N.J., told Automotive News. “Dealers are carrying a lot more inventory than they’d like.”
While Volvo works to update the lineup with new electric and plug-in hybrid models, it is spending more to move product today. According to Cox Automotive, Volvo spent 8.9 percent of its average transaction price on incentives, compared with 6.9 percent for the industry.
Volvo must focus on “price, product and promotion,” Flanagan said.
Dealers at the Jan. 24 make meeting will want to hear Volvo’s plans for its product lineup now that the automaker has walked back its EV-or-bust strategy.
“Volvo’s pipeline was all EV, EV, EV and that’s what we are still seeing,” Flanagan said. “What’s it going to look like in the future now that fervor around electric cars is dying down?”
Volvo is updating its mild-hybrid and plug-in hybrid XC90 and XC60 with energy-efficient, high-density electric motors and more advanced batteries.
But some dealers said product refreshes won’t move the demand needle far enough.
Last year’s freshened XC90 “looks good, but the model is a little long in the tooth and Volvo needs to make some real changes,” said Ernie Norcross, owner of Volvo Cars Memphis in Tennessee.
Volvo has said it will bring longer-range PHEVs that likely would be based on the scalable product architecture platform it calls SPA1.
“You need to be in that business,” Norcross said.