Volvo is quitting the car subscription business.
The automaker aims to transfer its Care by Volvo programs in Germany, the Netherlands, Sweden and Norway to new owners while phasing it out in the U.K., Volvo confirmed to Automotive News Europe Sept. 12.
It is the latest major strategy shift for the company, which ended its quest to be an electric-only automaker by 2030 on Sept. 4 and earlier this year said it is no longer aiming to get half of its global sales via online channels.
"Volvo Cars has begun the process of reviewing local market solutions to transfer active contracts to new partners with the aim of ensuring a seamless changeover of finance providers," the automaker said in a statement. "The decision to move away from in-house leasing to a partner-based setup is to ensure we are providing products that suit customers' needs, while at the same time ensuring we are allocating resources toward further digitizing our whole business."
Volvo has also ended the program in the U.S., where it was available in more than 40 states. Volvo on Sept. 12 told Automotive News it had suspended the program "for the foreseeable future."
"This allows for concentrated focus on our core customer offers and the coming introduction of new products, [and an] increase in operational efficiencies," spokesperson Russell Datz said.
The U.S. version of the program faced strong opposition from dealers in California after it was launched there in 2018. However, Volvo rebooted the program as recently as 2023, which included bringing it back to California.
Former CEO's brainchild
Care by Volvo was the brainchild of former CEO Hakan Samuelsson, who timed the subscription program's launch to coincide with the debut of the automaker's first compact SUV, the XC40, in September 2017.
"His vision was clear," Volvo marketing expert Thomas Andersson told Automotive News Europe at the time when asked about Samuelsson's vision. "You enjoy the vehicle. We will take care of the rest."
Andersson referred to it as "a revolution for the commercial part of the business."
At launch, Volvo wanted customers to sign a two-year contract for €699 a month, for which they would get maintenance, insurance, tire changes, as well as digital concierge services such as fueling, cleaning and even the delivery of packages to the car.
A key difference between the subscription and a traditional lease was that were was no down payment and no balloon payment at the end of the contract.
The length of the contract and the the monthly cost were often in flux.
Linked to an EV future
In 2021, Volvo tied Care by Volvo together with its future as an electric-only automaker.
"Combined with online sales, Volvo Cars will focus on a complete convenient customer offering, all under the Care by Volvo name," the automaker said.
As recently as February, Volvo executives were quoting positive numbers connected to the subscription scheme.
Axel Zurhausen, who leads the Care by Volvo program in Germany, told Automotive News Europe that subscriptions rose 8 percent last year, accounting for about 10 percent of the automaker's total volume. He said the program has about 6,500 customers.
Volvo on Sept. 12 declined to say how many customers are using Care by Volvo throughout Europe. In addition, Datz declined to disclose the number of U.S. subscribers and said those enrolled in the program can finish their term, after which they would be eligible for a $1,000 credit toward a new Volvo purchase or $500 toward a lease.
