Volvo Suspends Vehicle Subscription Service across US and Europe

Overview

• Volvo has paused its Care by Volvo subscription program in the US and Europe.
• Current members can complete their terms.
• Decision made as part of a cost-cutting strategy.

Details of the Suspension

• Official end date of the program: August 1.
• Existing subscribers will receive either a $1,000 credit for a new Volvo purchase or $500 towards a lease.

Reason for Suspension

• Focus shift to core offerings and new product launches.
• Aim to improve operational efficiency.
• Part of a broader cost-cutting move.

Background

• Care by Volvo launched in 2017.
  • Initially faced resistance from dealers.
  • California's DMV investigated Volvo for not adequately informing dealers.
  • Program was revamped in 2019 and profitable by 2020.

Features of the Subscription Service

• Offered flexibility with lower monthly costs than traditional leasing.
• Customers could choose from existing stock, swap models, or terminate contract after five months.
• Monthly fee included vehicle, insurance, and roadside assistance.
• Pricing started at $600 for a combustion-engine Volvo XC40.

Impact and Success

• Program attracted new customers; 80% were first-time Volvo buyers.
• Dealers benefited through revenue sharing and reselling vehicles.
• Total subscriber numbers were undisclosed.

Additional Insights

• GlobalData offers reports and insights on related topics.
  • Example: Climate Change and its Impact on Insurance Market.

Conclusion

• Volvo's decision to pause the subscription service is seen as a strategic move to better align with financial goals and market demands.

Further Reading and Resources

• Articles on car subscription models and Volvo's market impact are available for deeper understanding.

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