DOUGLAS A. BOLDUC

Why Volvo picked XC40 to launch VIP service

Douglas A. Bolduc is managing editor at Automotive News Europe.Douglas A. Bolduc is managing editor at Automotive News Europe.
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Volvo CEO Hakan Samuelsson knew long ago that he wanted to do something special with the XC40, which is the first expansion of the Swedish automaker’s portfolio since the arrival of the XC60 in 2008.

“His vision was clear,” Volvo marketing expert Thomas Andersson told me when discussing Samuelsson's vision. “You enjoy the vehicle. We will take care of the rest.”

To achieve this, Andersson was recruited by Samuelsson to launch Care by Volvo, a subscription-based, flat-fee VIP service that the automaker believes could become a “revolution” for the company.

“We think Care by Volvo will be a big step change,” Andersson said during a press event ahead of the XC40’s unveiling on Thursday. “We think we can provide a better experience than what is out there today.”

Those who agree to Volvo's two-year contract can get maintenance, insurance and tire changes as well as digital concierge services such as fueling, cleaning and even the delivery of packages to the car.

Volvo said the service will cost 699 euros a month across Europe. That is higher than a traditional lease because of all the addition perks offered.

“The idea is that the customer will say, ‘I’m willing to pay for that’,” Andersson said. The 26-year Volvo veteran believes customers will be interested in the new service for one simple reason: “Time is a luxury and people are currently time poor. Saving time is a key focus of Care by Volvo.”

The service will be rolled out with the XC40 in seven European markets -- Sweden, Norway, Germany, Italy, Spain, the UK and Poland as well as the U.S.

Andersson said that’s just the start: “We will quickly expand to more markets, add more models and add more services.”

While he admits the service won’t be profitable from the start and that he has no idea what the take rate will be, he and his 20-person team believe that it was time to shake up this part of the auto business.

“It’s a revolution for the commercial part of the business, which is a domain where not that much has happened for a long time,” Andersson said, adding that the main challenge he sees is getting Volvo used to having a much more direct relationship with its customers. “This needs to become part of the fabric of the entire company,” he said.

You can reach Douglas A. Bolduc at dbolduc@crain.com.

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