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Between improving logistics and the arrival of the highly anticipated EX30, the electric compact SUV, Volvo France sees progress in 2024. Management expects a volume of 22,000 deliveries, 43% more than last year.
The EX30 could sell a total of 7,000 units in 2024 and become Volvo France’s bestseller. ©Volvo Cars
Volvo France is betting on a sharp increase in its deliveries in 2024. The Swedish manufacturer’s subsidiary presented a 43% growth plan on January 26, 2024, which is expected to bring the annual total to 22,000 units.
Firstly, because the network is waiting for 9,000 cars to be put on the road. The rest of 2023 will still be partly characterized by production problems. “We have a six-month portfolio as of today“, estimated Yves Pasquier Desvignesthe president of Volvo France.
Complications that he said affected the subsidiary’s performance. It ended with 15,325 new vehicle deliveries in 2023 (+11.6%), including 14,898 units from intra-year sales (+10.9%).
also read : Yves Pasquier-Desvignes, Volvo Car France: “The EX30 comes at the best time”
Then Volvo believes it can count on the EX30’s contribution. The new all-electric compact SUV was already a hit in the pre-launch phase. Between June and December, the brand recorded 3,540 orders, even though the car was nowhere to be seen. More than a success, a record in this field for Volvo France, whose forecasts for 2024 go to 7,000 units, making the latest addition a result bestseller from the range.
Yves Pasquier-Desvignes concludes by emphasizing that the Swedish range will be fully aligned with the direction of the French market. The disappearance of diesel engines on the one hand and the increasing electrification of models on the other will help Volvo win customers. Of the 22,000 VN, 52% will be electric vehicles and 22% will be PHEVs. Specifically, Volvo wants to triple its sales of electrified cars.
Get 0.4 penetration points
The forecasts are based on the belief that the French market will not develop further. The subsidiary will sell 1.762 million cars this year. Due to the composition of the range, the brand will address a volume of around 953,000 units, of which 222,000 will be exclusively in premium vehicles. Volvo wants to gain 1.2% market share, an increase of 0.4 points.
We will have to deal with a complex environment consisting of price rivalry. Like BMW Group France, Volvo France doesn’t want to get in each other’s way. Yves Pasquier-Desvignes believes that the issue concerns more general brands. The strength of the brand image is still maintained by the European premium manufacturers. “As an importer, we would recommend stopping the bonus policy, which ultimately causes value-destroying reactions.” he slips.
Sellers have reported a wait-and-see attitude among consumers in recent weeks. A potential harm to the brand, whose strategic axis will be to accumulate sales through profitable channels. Last year, Volvo’s mix was 24% private registrations (3,621 VN; -2.1%), compared to a national average of 46% (822,968 VN; +18.5%). But also 14% of sales to companies (2,126 VN; +28.8%) compared to an average of 15% (283,525 VN; +15.1%).
Volvo also increased its deliveries to short-term rental companies significantly with 1,136 units (+70.8% in a market of +15.1% to 146,471 units), thus achieving a mix share of 8% of the national average. In LLD, sales rose 3.4% to 5,428 units, representing 36% of the brand’s total volume, while the market needed 26.8% to settle at 15% of the mix.
After-sales in record mode
So far, retailers have worked on a just-in-time basis. There is no storage effect for new cars. However, the increase in deliveries and therefore also in return campaigns for used cars has increased the volume of sales outlets, the president admits, without being alarmed.
An economically healthy situation, coupled with an increase in financing figures. The number of cars and the average amount financed have increased for both new and used models. The subject of one file were 3,412 VNs (+8.5%), the average amount of which was around 41,000 euros (+5.1%). Also affected were 1,324 VO (+32%) with an average amount of 21,000 euros (+5%). Financial production closed at 141 million euros for the UN (+17%) and 28 million euros for the VO (+40%). The only downside is that rental products lost two points at 90% penetration.
also read : World sales record for Volvo in 2023
At the same time, after-sales worked very well. The trend towards maintenance and loyalty programs has effectively increased traffic and revenue. Trade in spare parts reached 75 million euros or +14%, a record for the French network. The Volvo France report highlights that 35% more tires were purchased last year. On the other hand, equipment was punished with a decrease of 2% to 8.7 million euros.
The forty investors can rub their hands. Projected profitability is estimated at 1.8%, with sales growth of 20%. “I even think they will be on top” says Yves Pasquier-Desvignes. The 126 Volvo dealerships (40% of which are exclusive) cover 85% of the territory and should remain in this configuration in the long term. Especially since the hypothetical agent contract “is not on the agenda in France“.
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