Volvo will end dealer agreements with Bilia in online sales push

STOCKHOLM -- Volvo Cars is ending dealer agreements with retail group Bilia in Sweden and Norway.

Volvo is trying to boost online sales to maintain volumes despite temporary closures of dealerships around the world to slow the spread of COVID-19. Volvo aims to more than double global online sales to 50 percent by 2025.

The termination, which has a notice period of two years, covers both Bilia's car sales and services business for Volvo models.

Bilia is a leading Nordic dealership with about 140 facilities mostly in Sweden and Norway.

It said its turnover for sales of new Volvo cars in Sweden and Norway was about 6.4 billion Swedish crowns ($743 million) in 2019, compared with 29.5 billion crowns in total revenue for the group.

Bilia is No. 11 on the annual ranking of Europe's largest dealer groups, figures from analyst ICDP show.

"The car business is subject to a global transformation and we are convinced that Bilia will continue to play a central role also in the future," Bilia CEO Per Avander said in a statement on Monday.

Bilia said sales of used cars were not covered by the dealer agreements and not affected by the termination.

In September, Volvo announced it was buying Upplands Motor, another major Swedish dealership group, and that it planned a full takeover of retailer Bra Bil. It plans to merge the two businesses with its own dealership, Volvo Bil.

Volvo is planning to use the merged businesses in Sweden to shape its future car sales and strengthen its direct contact with customers as they move increasingly online.