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Care by Volvo

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Care by Volvo

Post by 93Regina » Mon Mar 25, 2019 10:53 pm

The Book by Cadillac vehicle subscription service had skittered along for more than a year when General Motors executives shuttered the venture in November. Few customers bit at the service's $1,800-per-month price.

Volvo's fledgling subscription service, Care by Volvo, is seemingly more popular with consumers, though company officials decline to provide enrollment figures. But Volvo's U.S. dealers have rebelled. In a petition filed in January with the California New Motor Vehicle Board, dealers claim that the service violates franchise laws intended to stop manufacturers from competing with retailers.

Suffice it to say vehicle subscription services have gotten off to a rocky start.

Perfect pricing

Care by Volvo, launched in November 2017, garnered a lot of attention from customers, who ran through a supply of vehicles intended to last the year in its first four months, according to Anders Gustafsson, CEO of Volvo Cars of North America. That caused some of the tension with dealers, who balked at seeing new XC40s they'd been itching to sell diverted to the subscription service. Last fall, Volvo agreed to cap the program's share of the vehicle to no more than 10 percent of XC40s produced.

That helped, but unease about the future remained.

"Our retailers are asking, 'Please let us be involved, because we can help,' " Gustafsson said in November. "We have a network of 292 retailers and 10,000 people in this country to take care of customers, so of course we should use them. So that's really the question — how do we put the technology we talked about, and integrate it, within our retailer structure?"

From a consumer perspective, whether subscriptions are handled by traditional dealerships, other retail locations or online is less important than the price.

On that point, Volvo may have the most compelling offering. For between $650 and $850 a month, subscribers receive a Volvo XC40 crossover, insurance, maintenance, roadside assistance and seasonal tire changes. Customers must sign a two-year agreement, which lets them change vehicles after one year.

But while Book by Cadillac faltered at $1,800 per month, Care by Volvo showed that customers are interested at the right price.

"It's just showing that when we get the price right, a good segment of the population will gravitate toward these type of services," Bradley said. "It's an experimentation to find the right price point right now."