FN50 leasing companies sign direct sales terms with Volvo

Volvo has signed direct sales agreements with 23 of the FN50’s top 25 leasing companies and is now working on a solution for brokers ahead of a full switch to its direct model in June.

The agreements enable Volvo to take greater control over the allocation of vehicles via its central pool of stock as well as identify earlier any trends in model and specification orders to quickly adjust the production pipeline and ensure it can satisfy demand.

Rob Morris, Volvo Car UK head of fleet and remarketing, said: “This will bring down supply times because cars will be coming from our central pool rather than a single retailer’s stock as we can swap in and out across our sales channels. It will also give leasing companies better transparency.”

Currently, Volvo cannot identify which company is placing the order via a broker and it also doesn’t know who is providing the funding. Brokers often switch funding provider at the last moment to take advantage of a better deal, which can put leasing companies at risk, said Morris.

“Our ordering system for BVRLA-accredited brokers will mean orders are placed on the Ebbon-Dacs system and allocated to the customer’s retailer of choice,” he added. “This feeds into our central customer-driven system.”

Direct agreements will improve pricing consistency for fleets, because Volvo will have one national rate; previously, each retailer could offer its own price depending on the size of discount they wished to apply to the deal.

“Retailers are still critical to the handover, for which they receive a handling fee, and the aftersales services,” Morris said.

“They can also tap into the central stock, so it reduces availability times. Our delivery times are three-to-five months, and we are picking up business as a result of others being unable to fulfil it.”

Volvo is also picking up more business with smaller fleets following the launch a year ago of Fleet and Business Online.

This portal gives sub-50-vehicle fleets access to ‘negotiation-free’ pricing and the ability to order online, plus latest details on the model range, including cars in stock and delivery times. Around 700 accounts have been created.

“They don’t have to create account to get a quote, but they do to place an order, so all these accounts have all ordered one or more vehicles,” said Morris. “We are seeing a trend of them embracing this approach.”

The service has just been expanded to include pricing terms based on payment options, including outright purchase and subscriptions for 24, 36 and 48 months. It also offers fleets the option of making a down payment.

SMEs can also build a skeleton company car policy – Morris describes it as “the start point of mini fleet management”.

The next development stage will see a similar solution created for larger fleets. Volvo has already signed agreements with some fleet customers to pilot the digital expansion.

“They are fleets which traditionally purchase outright but who want to be able to order direct and send links to their drivers like the SMEs,” Morris said.

Volvo hopes to launch the solution, which will also include a telematics subscriptions offer, by the beginning of quarter three.